Stronghold picks up Cairns pub, development sites
Stronghold Investment Management has added a Cairns pub and neighbouring apartment development sites to its diversified portfolio.
The Grand Hotel, at 34 McLeod Street, at the south east corner of Shields, is setting it back c$13 million.
The vendor, Jaz Mooney’s Oxford Hotels, offered it with a 10 year leaseback.
It paid $8.5 m in 2019.
CBRE Hotels’ Paul Fraser was the agent.
The Grand Hotel
The recently renovated hotel contains accommodation suites, a bar and gaming room with 35 electronic gambling machines.
It is connected to a bottle shop.
There are also six shops on land with development upside; combined the holding spreads over 4050 square metres and has a third frontage, at Sheridan St.
“The high profile corner property is situated in the heart of the Cairns CBD directly opposite Cairns Central – the largest shopping centre in Far North Queensland,” Mr Fraser said.
“The opportunity for the owner to sell the freehold interest in the asset was undeniable in a market chasing annuity of income and long Weighted Average Lease Expiries,” he added (story continues below).
“Ultimately, the way we structured the lease meant…the owner was able to ensure continued high cash flow and profits year on year whilst also realising a high exit price which will enable Oxford to redeploy capital into other projects”.
Brisbane based Stronghold will retain the asset in the Hospitality Property Trust No 18.
The manager now controls hotel investments worth c$70m.
“We are delighted to finalise this acquisition on behalf of our investors in what has been a challenging transactional environment,” Stronghold director Steve de Nys said.
“In addition to the established hotel, the property includes c3100 sqm of land with development potential up to 14 levels,” he added.
Last month, on the Gold Coast, the Feros family’s JDA Hotels, in a partnership, paid c$12m for the vacant One60 Tavern, in Bundall.
Star Hotels also spent c$9.5m for the Townsville Central Hotel.
In Brisbane, ALE Property Group offloaded the historic Royal Exchange, in Toowong, for $14.05m – nearly $4m over the January, 2021 book value.
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