CBRE Hotels has announced the sale of The Grand Hotel Cairns, QLD.
Stronghold Investment Management has acquired the freehold interest of the Grand Hotel Cairns and a neighbouring development site on behalf of the Stronghold Hospitality Property Trust No.18.
Positioned on over an acre of land with three street frontages, 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.
The high performing, newly renovated pub offers 35 gaming machines and features a drive-thru bottle shop. The sale includes a head lease over the entire site and six adjoining retail shops, with the vendor remaining as lessee under an initial 10-year lease agreement.
"The opportunity for the owner to sell the freehold interest in the asset was undeniable in a market chasing annuity of income and long WALEs. Ultimately the way we structured the lease meant that 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," explained CBRE's Paul Fraser.
The property has been identified as a trophy asset for Stronghold, boosting hospitality assets under management to circa $70 million while providing a medium to long-term deployment play.
"Cairns continue to be one of a handful of Queensland regional centres where the appetite for landmark sites remains incredibly strong," Fraser said.
This transaction also highlights the market appetite for structured deals that provide a beneficial outcome for both buyer and seller.
"We are delighted to finalise this acquisition on behalf of our investors in what has been a challenging transaction environment. In addition to the established hotel, the property includes circa 3,100 square metres of land with development potential up to 14 levels. We look forward to working with local stakeholders and our tenant to maximise his potential over the medium term," added Steve de Nys, Director at Stronghold.