Congratulations on the purchase of Cleveland Winery. What are some of the key features about this property that made it such a great opportunity?
There were quite a few things that were attractive to be honest. The first is that it was a business that we saw large financial upside with post-repositioning. It is a property with good bones architecturally and it used to make good money but that has subsided in recent years. We plan on refurbishing the hotel and installing Lancemore management know-how, which together will drive the value in the asset.
The second is that it is a large parcel of land – 40 hectares in a location like this was attractive for a generational purchase. Thirdly, Lancemore Macedon Ranges is 10km down the road and we saw an opportunity for both hotels to complement each other while concurrently stopping any competition entering at an inexpensive entry point. Fourthly, the winery is in a great location with good quality vines and will make a fantastic addition to our wine portfolio. Last but not least, the price point was attractive. So it was compelling on a number of fronts.
What can you tell us about refurbishment works planned for this site to bring it to Lancemore’s high standards? Will there be a name change?
Right now all we really have is the vision for the hotel. It’s at the embryonic stage so I won’t go into details of the design vision as the detail will no doubt change. What I can tell you is that this will be designed in-house and will be a departure from the current hotel aesthetic internally but will retain a rustic sensibility which is attuned to both its architecture and location. At this stage we think it will sit into Lancemore’s white label range and remain as Cleveland Winery. However, once we have finalised our design, we will make a call on that – it all depends on whether we think it can fit the Lancemore brand standards or not. Watch this space!
Lancemore has quite an affinity with regional Victoria. What is it about this part of Australia that you love so much?
Regional Victoria is where the company’s roots are. The first three hotels we built were in Regional Victoria so part of the reason we have a strong presence there is due to legacy to be honest (we have not sold an asset yet).
In the last decade, we have actually added a lot more in CBD locations and hotels in other states. Nonetheless, Melbourne is our home base and we know these regions and assets intimately. From a non-financial ownership perspective, running hotels is more than a P&L statement or a Balance Sheet for us. It’s a passion and a vocation as well.
We love our hotels and we love Australia’s regions, so from a very personal point of view, it gives us a great deal of joy being able to visit our hotels more regularly and spend time with the teams and have an intimacy with the property.
A glass of wine at sunset over the distant horizon is hard to beat. Doing it with your family and friends on regular or special occasions is what makes memories and in turn what makes the properties even more special. It’s a multi-generational family business after all and financials and strategic reasons are a prerequisite but not the only reason we get into deals.
What will be the key markets and demographics that you plan to target with the new Cleveland Winery?
It will be a real mix of MICE, Weddings & Events, FIT and Restaurant/Cellar Door. Like many of our regional hotels, there will be multiple market segments and lines of business that we will aim to attract. We also will focus on the wellness sector at either Lancemore Macedon Ranges or Cleveland Winery. Both are perfect for it – we just need to work out which one is better!
What other growth opportunities does Lancemore see in the regional winery sector?
There is no doubt we are a market leader in this space and know it better than most. This will be our fourth boutique hotel with a vineyard and land surrounding it.
To be honest, most capital cities in the southern part of Australia have wine regions with strong tourism visitation. Some are well represented with quality hotels in the region (e.g. Mornington Peninsula) and many have untapped potential. We are actually speaking to a few owners about potential opportunities in this space as we speak. It’s a shallow market but one that still has opportunity in many parts of Australia.