Developer lists new Pakenham hotel
A hotel built on an estate occupied for generations by the Bourke family, which in 1875 established the Pakenham Racing Club then later, constructed the Pakenham Racecourse down the street, is for sale.
With a leaseback to Mercure, the six week old asset, 77 Racecourse Road, Pakenham, is expected to fetch over $15m, reflecting a six per cent-plus net passing yield.
The Accor-owned chain is on an initial agreement expiring in 2042; over three levels, the venue contains 64 suites, conference facilities, boardrooms and an open-to-the-public restaurant.
The 4287 square metre block also includes 71 car parks.
Stonebridge’s Rorey James and Kevin Tong with Wilson Property’s Ben Wilson and Emma Dunne are representing the vendor, Traralgon based BFN Developments.
Led by Brett Neilson, the builder and operator also recently completed a Mercure as part of a major Warragul mixed-use complex.
Hub of activity
The Racecourse Rd property abuts the Cardinia Club – also once owned by the PRC – controlled by Stronghold Investment Management since 2019.
It is also near a housing estate replacing the old Pakenham Racecourse.
Elsewhere in the area, a former satellite town, now a major metropolitan growth corridor, developers including Avid Property Group and Burbank subsidiary National Pacific Property have recently acquired major blocks for housing estates (story continues below).
Last year, Leaf Corporation in partnership with BANCO Group snapped up the suburb’s Pakenham Place from QIC with plans for a major refurbishment and extension.
Near the area, ISPT recently purchased a 79 hectare Office South site for a business park,
“This is a terrific opportunity for investors to enjoy a rare 20 year initial lease term together with a building which will be purchased well below replacement cost,” Mr James said of 77 Racecourse Rd.
Mr Wilson added the hotel filled a gap in the market for modern/quality hotel space.
“The only accommodation options within Pakenham are circa 40 years old,” he added.
The Bourke family also owned a c1957 homestead in the area – 65 Racecourse Rd – which is heritage protected and six years ago, divested privately.
The racetrack which previously neighboured that property sold for c$30m a decade ago for housing. Proceeds funded a replacement facility at Tynong.
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