Uluru luxury lodges in sale to US group
US private equity group KSL Capital Partners has swooped on the hospitality assets created by Australian luxury lodge pioneers James and Hayley Baillie, buying up a majority stake in their $100 million-plus domestic empire.
It includes the multi-award-winning Southern Ocean Lodge on South Australia’s Kangaroo Island and Longitude 131 next to Uluru.
The transaction negotiated over the past year will see the Baillies, who founded their luxury lodges chain in 2003, retain Capella Lodge on Lord Howe Island and the initial rights to their $30 million, yet-to-be-built Remarkable Lodge on Tasmania’s rugged southeast coast that may be folded into the portfolio ownership by KSL in time.
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Crucial to KSL’s plan is to fund the purchase of more Baillie lodges, potentially building a portfolio of up to 10 by 2024.
Baillie will assume the position of chairman of the new Baillie Lodges group and says he will buy more luxury properties to convert to the Baillie brand, potentially in New Zealand. But the focus will remain on acquiring Australian luxury assets.
Baillie says the expansion depends on KSL.
“Their vision is to follow us and have a portfolio that has the right scale,” Baillie says, adding that he expects the expansion to take five years.
“Certainly, this is the biggest tourism deal in the luxury lodge space.”
The Longitude 131 luxury lodges at Uluru.
Under the deal James and Hayley, daughter of entrepreneur Dick Smith, will retain some ownership of Baillie Lodges with options to increase or decrease their shareholding.
The terms of the deal were not disclosed.
Baillie says he had been approached by KSL, whose last entry into the Australian market was the purchase of part of the Orion Expedition Ship in 2008.
“After everything we put into it we were not for sale, (although) we have had lots of approaches from private equity players and international hotel groups have been stalking us,” he says.
“Five years ago people didn’t know what luxury lodges were. Now they are the flavour of the month. This deal gives us a capital partner to build on.”
Australia has lagged New Zealand in the development of luxury lodges until the Baillies started developing them on a formula of unprecedented luxury and an all-inclusive tariff.
The Baillies retained Capella, Lord Howe Island’s premium luxury lodge, for sentimental reasons. It will still be part of the Baillie Lodges group. “It will be business as usual and Capella carries on as usual but the shareholding remains 100 per cent with Hayley and me,” Baillie says.
The deal was negotiated by Tom Gibson, vice-president of investment sales for JLL Hotels.
“KSL’s investment into Baillie Lodges represents a new record on a price-per-key basis in Australia,” Gibson says.
This article originally appeared on www.theaustralian.com.au/property.
