Receivership sale campaign for Oaks on Lonsdale Serviced Apartments

Sydney, 28 January 2014 – The Oaks on Lonsdale Serviced Apartments complex in Melbourne is to be offered for sale via an international Expressions of Interest campaign.

Wayne Bunz and Rob Cross of CBRE Hotels have been appointed to steer the sale of the freehold interest in the property on behalf of PPB Advisory, as Receivers & Managers appointed.

Mr Bunz said the campaign was expected to generate significant interest, predominantly from South East Asian and Chinese investors looking to gain a foothold in the Australian hotel market.

“Melbourne is considered a priority destination for foreign capital into Australia,” Mr Bunz said.

“Without exception, global investors, particularly South East Asian and Chinese buyers, will not enter other Australian markets until they have made an initial acquisition in either Sydney or Melbourne – the capital city with the strongest revenue per available room growth during 2013.”

The 4.5 star Oaks on Lonsdale is prominently located within the north-east corridor of the Melbourne CBD, in the heart of the city’s live theatre precinct.

Completed in 2007, the property offers 148 spacious guest rooms, the majority of which are one and two bedroom apartments. There are also five levels of parking for 56 cars.

The complex is currently operated under a lease to Oaks Hotels & Resorts (Vic) Pty Ltd expiring in 2017, with a further three, five-year lease extensions available.

“A fully leased hospitality asset is a rarity in the Australian hotel market and as such we expect that non traditional institutional buyers as well as the more traditional hotel buyers will all express interest in this offering,” Mr Cross said.

“Most Australian hotels are subject to Management Agreements and therefore have a variable income stream over time.  The leased nature of Oaks on Lonsdale ensures the hotel income is not subject to these fluctuations, nor will the hotel be affected by future supply increases in Melbourne.”

In addition, Mr Cross said the property was expected to appeal to owner operators and strata developers.

“Vacant possession is available if required, thus allowing for a rebranding or owner occupation,” Mr Cross said.

“The incoming owner could also look to strata-title and sell-down the individual apartments as an alternative exit strategy.”

There are currently no food and beverage facilities within the property although there are space opportunities where these facilities could be incorporated.

The International Expressions of Interest campaign closes February 27, 2014.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue).  The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com. About CBRE Group,Inc.