NEXT Hotel in Brisbane’s Queen Street Mall changes hands for check-in sale price of “circa $150 million”

A Melbourne-based fund manager has expanded its hotel portfolio with the acquisition of the NEXT Hotel in the Brisbane CBD

The NEXT Hotel in Brisbane’s Queen Street Mall has changed hands.

A LANDMARK Brisbane hotel with prime retail space fronting Queen Street Mall has sold with its check-in sale price believed to be around $150 million.

The 304-room, 4.5-star NEXT Hotel has been snapped up by Melbourne-based funds manager Salter Brothers, formerly SB & G Group.

JLL’s Tom Gibson and Simon Rooney, who brokered the deal, were remaining tight-lipped about the transaction details and declined to comment on the purchase price.

But according to industry sources the unconditional deal sealed for the hotel asset — formerly known as Lennons Hotel — is understood to be worth “circa $150 million”.

It includes two levels of retail space with frontage to Queen Street Mall, the CBD’s premier shopping precinct.

The property previously changed hands in 2015 when Sydney-based investment management company Challenger paid $133 million for the then recently refurbished and rebranded asset.

Brisbane’s NEXT Hotel has prime retail space fronting Queen Street Mall.

Mr Rooney said mixed-use CBD retail assets in prime locations were typically tightly-held and were in high demand nationally.

“The asset benefits from its location on one of the strongest retail strips in Australia,” he said.

“Retailers continue to seek locations that maximise foot traffic and exposure for their business, which ultimately underpins tenant demand for super-prime retail strips and precincts, especially in CBD markets nationally.”

JLL’s senior director of retail research Andrew Quillfeldt said CBD retail was one of the strongest performing retail sectors at present.

“It’s supported by positive underlying drivers such as strong residential population growth as a result of the last development cycle, strong white collar employment growth, strong tourism growth and key infrastructure upgrades in most markets,” he said.

“The combination of factors is driving retail spending and tenant demand within CBD markets.”

Mr Gibson said the edgy hotel property operated by NEXT Story Group was primed for growth with its proximity to the $3.6 billion Queens Wharf casino project, the planned $2 billion Brisbane Live entertainment precinct and the recently-opened $200 million Howard Smith Wharves.

“This is a timely acquisition for Salter Brothers to enter Brisbane as the market begins to mature with its record wave of private and public demand-supporting projects underway,” he said.

The 304-room, 4.5-star NEXT Hotel in the Brisbane CBD.

The Queensland capital is undergoing a transformation with more than $12 billion worth of private and public infrastructure projects, including a second runway, new cruise terminal and underground railway projects. Together with the addition of new luxury hotels such as the W Brisbane, Westin Brisbane, James Street’s Calile Hotel and Emporium South Bank, it is establishing itself as a major global gateway city.

“With Sydney and Melbourne hotel markets becoming increasingly difficult to enter, we are receiving record interest for other core markets that feature attractive short- to medium-term market fundamentals, as evidenced by the recent liquidity seen in Brisbane and Perth.” Mr Gibson said.

He said the total number of room nights sold in Brisbane for year-to-date through to April 2019 had increased by 3.5 per cent, showing the market’s resilience through the addition of new supply.

The addition of Brisbane’s NEXT Hotel expands Salter Brothers hotel portfolio to more than 2400 rooms with seven hotels across Sydney, Melbourne, Canberra, Brisbane and the Gold Coast.