Australian hospitality group TPG Hotels has acquired the 4-star Pacific Hotel Cairns, positioned on a 3,570sqm CBD site.
The 11-storey hotel features 207 rooms and suites and a range of guest facilities including an award-winning restaurant, a guest lounge, a swimming pool, and parking.
Four retail tenancies, which are currently occupied by two long-standing tenants, Destination Cairns Marketing and Flamingos Tiki Bar, also form part of the asset.
Having opened in 1982, the Pacific Hotel Cairns has undergone a range of refurbishments and upgrades over the years.
In 2018, 31 new rooms were added and over FY22/23 the guest rooms and hallways from levels four to nine were renovated.
In 2021, a fire ravaged levels 10 and 11, affecting 44 rooms, which remain unavailable for bookings.
CBRE Hotels’ Wayne Bunz and Hayley Manvell negotiated the sale on behalf of the Perth-based Pacific Hotels Group following a “discreet” off-market expression-of-interest process.
“The sale was negotiated by CBRE Hotels following our client’s approach in mid-January, allowing us to target select investors capable of completing the transaction prior to the commencement of the client’s proposed refurbishment program,” Bunz said.
“This delivers another result for our client, Pacific Hotels, following the sales of the Pacific Hotel Brisbane and Coral Cay Mackay.
Prior to the sale, the hotel was owner-operated under the Pacific Hotel brand, however vacant possession was available upon completion allowing future operational flexibility.
“The sale represents an initial yield of 4.3% and a stabilised yield on a three-year basis of 7.25%. This demonstrates the demand for Cairns’ accommodation assets with genuine upside,” Bunz added.
“Infrastructure improvements and a lack of new hotel supply is underpinning investors in Cairns, with the supply constraints expected to support the continued recovery of the city’s limited pool of assets.
“This has already been reflected in increased room rates and revenue, with ADR and RevPAR 41% and 24% above pre-pandemic levels in 2023.”