Bond family buy back historic hotel
Centuria has sold a historic Fremantle hotel picked up following its Primewest takeover three years ago.
In a twist, the Esplanade Hotel covering 46-54 Marine Terrace and 7 Essex Street found favour with Cosgrove Group, an asset manager and investor co-established in February by Banjo Bond, the son of John, who co-created Primewest in 1995, and grandson of high profile late businessman, Alan.
The $116.5 million result reflects a 9.7 per cent passing yield.
It is also 16.5pc over the June 30, 2023, book value.
Primewest paid $88.5m for the freehold going concern in 2012, holding it in a single asset unlisted fund.
CBRE’s Aaron Desange and Michael Simpson were the agents.
The deal comes three months since Centuria sold two suburban Sydney malls also acquired with its Primewest takeover.
Vacant possession rejected
Developed in 1875 as a private residence, Cranworth House, a conversion to hospitality use was completed by the early 20th century.
Also extended a few times, including in the 1980s, there is c12,551 square metres of gross lettable area.
On 1.2 hectares, rising five floors, there are also 300 suites, rated 4.5-star.
A conference facility is one of only three in the city able to accommodate over 1000 people.
There are two pools, a gym, four restaurant tenancies and 172 car parks, some with EV charging stations, as well.
Rydges has managed it since 2013.
Offered with optional vacant possession, Cosgrove wants the operator to stay on (story continues below).
Fremantle is 19 kilometres south west of Perth’s CBD.
Renovation planned
Cosgrove intends to undertake a major renovation of The Esplanade Hotel after settlement in the third quarter.
“This is a rarely traded trophy asset located in the heart of Fremantle presenting a unique investment opportunity,” Mr Bond said, adding the yield was “compelling”.
“We were also attracted to the hotel’s income being derived from both tourist and business markets,” according to the executive.
Cosgrove director Rob Thomas said the capital expenditure will be significant “to enhance the hotel’s facilities and position the asset for growth”.
“We expect the hotel’s performance to also be underpinned by the lack of supply coming online in Perth in the near term due to elevated construction costs”.
Cosgrove grows
Cosgrove incorporates PWD, established with Mr Thomas in 2018.
John Bond is also a director.
The Fremantle purchase comes three months since the group picked up adjoining retail assets in Perth’s Murray St for $35.25m – a 30pc discount on expectation when the assets hit the market last year.
Last August meanwhile, as PWD, it acquired the city’s HomeCo Midland (now known as Midland Grove Homemaker Centre) for $74.8m.
In Sydney, the company is also behind a strata industrial development in South Strathfield and a Camperdown healthcare investment controlled with Mathieson Property.
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