Commonwealth Property acquires Rockmans Regency Hotel, Melbourne
21 February 2001
Commonwealth Property Hotel Fund (CPHF) has acquired the Rockman's Regency Hotel in Melbourne for $37 million, taking total assets to $81 million.
CPHF is a sector specific unlisted property fund established by Commonwealth Property to capitalise on value corrections in the hotel sector.
The fund, which has a limited life of eight years and aims to invest in major hotel markets over the next 18-24 months, was established in June 2000 with the acquisition of the Brisbane Marriott Hotel for $44 million.
Rockman's Regency Hotel, which will be CPHF's second asset, opened in 1982 as Melbourne's first boutique hotel and quickly rose to prominence as the city's premier hotel for the business and entertainment industry.
The hotel is located on the corner of Lonsdale and Exhibition streets in the city's CBD close to entertainment precincts and Chinatown.
According to Mr Selliah Kalyanakumar, fund manager of CPHF, the asset and the timing of the acquisition suited the investment strategy of the fund.
"Our medium term outlook for Melbourne, which is Australia's second largest hotel market, is strong with a recovery in 2002," Mr Kalyanakumar said.
"We are only interested in assets that offer the potential to add value and for Rockman's Regency, we have a strategy which should see strong returns," he said.
Marriott International (NYSE:MAR) has been appointed to manage the hotel.
Following an extensive refurbishment program that is expected to be completed in late 2001, the property will be renamed the Melbourne Marriott Hotel.
This will be first hotel under Marriott management in Melbourne and the eighth in Marriott's multi-brand lodging portfolio in Australia.
Mr Ed Fuller, president and managing director for international lodging at Marriott International, said the hotel would be an outstanding part of Marriott's Australian lodging portfolio.
"The property fits our strategic growth objectives and its founding principles of offering travellers a warm and inviting 'home away from home' matches our operating philosophy - we couldn't be more pleased," Mr Fuller said.
Commenting on Marriott's appointment to manage the hotel, co-vendor of the hotel, Mr Irvin Rockman CBE, said he admired Marriott's operations more than anyone else in the hospitality sector.
"I am pleased they are committed to continuing our personal and caring service which has given us an edge in a highly competitive market," Mr Rockman said.
CPHF is managed by Commonwealth Property, the property funds management and corporate real estate arm of Commonwealth Bank of Australia.
Rockman's Regency: A 185 room hotel located on the corner of Lonsdale and Exhibition Streets, Melbourne. The hotel offers a casual bistro style restaurant and lobby lounge; an indoor swimming pool, exercise room and sauna; a business centre, laundry/valet services and parking for 90 cars. For social events and conferences, the hotel will offer 381 sqm of space including a 126 sqm meeting room divisible into two sections, a 213 sqm conference room and a 42 sqm board room.
Marriott: Marriott International is a leading worldwide hospitality company with over 2,000 operating units in United States and 58 other countries and territories. Marriott Lodging operates and franchises hotels under the Marriott, Renaissance, Residence Inn, Courtyard, TownPlace Suites, Fairfield Inn, SpringHill Suites and Ramada International brand names; develops and operates vacation ownership resorts under the Marriott, Ritz Carlton and Horizons brands; operates Marriott Apartments; provides corporate housing through its Execustay by Marriott division; and operates conference centres. Other Marriott businesses include senior living communities and services, wholesale food distribution, procurement services and the Ritz Carlton Hotel Company LLC. The company is headquartered in Washington, D.C., and has approximately 151,000 employees. In fiscal year 1999, Marriott International reported system wide sales of US$17.7 billion. For more information please visit the Marriott web site at www.marriott.com. In Australia, Marriott's portfolio includes the Brisbane Marriott (267-room), Sydney Marriott (241), Marriott Surfers Paradise Resort (330), Renaissance Sydney (597), Courtyard Marriott Parramatta Hotel (181), Courtyard Marriott Surfers Paradise Hotel (405), Courtyard Marriott Great Barrier Reef Hotel (181).