Pacific Hotel sells to TPG Hotels for undisclosed sum

High-demand in Cairns hospitality markets has driven the sale of one of the Far North’s first high-rise hotels and the divesting of the city’s Accor-managed largest premier accommodation provider.

One of the Far North’s first high-rise hotels has changed hands. Photo: Brendan Radke.

High demand in Cairns hospitality markets has driven the sale of one of the Far North’s first high-rise hotels and the planned divesting of the city’s largest high-end accommodation provider.

On Thursday CBRE Hotels announced that a freehold interest in the four star Pacific Hotel Cairns had been acquired by Australian hospitality group TPG Hotels for an undisclosed sum.

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 11-storey hotel offers 207 rooms and suites and four retail tenancies, which are currently occupied by two longstanding tenants, Destination Cairns Marketing and Flamingos Tiki Bar.

Australian hospitality group TPG Hotels has acquired the freehold interest in the Pacific Hotel Cairns.

“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,” Mr Bunz said.

“The sale represents an initial yield of 4.3 per cent and a stabilised yield on a three-year basis of 7.25 per cent.

“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 demonstrates the demand for Cairns’ accommodation assets with genuine upside.”

Built by the Kamsler family and opening in 1983, the property was Cairns’ first hotel built to an international standard.

The Kamslers sold the property for $20m in 2015.

Fire gutted two rooms on the top floor of the Pacific Hotel, Cairns in 2021. Supplied

In 2018, 31 new rooms were added and during 2022 and 2023 guest rooms and hallways from levels four to nine were renovated.

A total of 44 rooms between floors 10 and 11 which were offline following a 2021 fire are understood to have held up the sale of the property by Pacific Hotels after a four-month campaign.

The Pullman Cairns International has also been listed for sale by Prime Value’s Shakespeare Property Group after nine years of ownership.

Accor Hotels manages the property under the Pullman brand and vacant possession of the hotel is available upon sale.

The Pullman International Cairns will be sold via an expression of interest campaign.

CBRE Hotels is managing the sale of the 324 room, five star hotel via an expression of interest campaign.

The offering also includes a two-level, 2644 sqm retail and commercial arcade known as Village Lane that includes 23 tenancies.

“This is arguably Cairns’ best hotel and has immense potential due to its central location, extensive size, and various value-add opportunities,” CBRE Hotels’ Michael Simpson said.

The marketing of the property follows a $17m refurbishment that was completed in 2021.

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Originally published as Pacific Hotel sells to TPG Hotels for undisclosed sum