Banjo Bond strikes major deal to buy Esplanade Hotel in Fremantle

The wealthy property developer and investor grandson of the late Alan Bond is behind a deal to buy Fremantle’s historic Esplanade Hotel.

Primewest is selling the historic Esplanade Hotel in Fremantle

An investment firm co-founded by Banjo Bond, the wealthy property developer and investor grandson of the late Alan Bond, has forked out $116.5m buying Fremantle’s historic Esplanade Hotel, representing a 16.5 per cent premium to its book value.

Back in 2012 the vendor, Australasian real estate fund manager, Centuria Capital Group purchased the 149-year-old freehold property and hotel business for an unlisted fund paying $88.5m. This week’s divestment represented capital growth of around 31.6 per cent on settlement, according to a statement from Centuria.

Mr Bond, a director of Cosgrove Group, which bought the hotel, said it was a rarely traded ‘trophy asset’ located in the heart of Fremantle and presented a truly unique investment opportunity.

“It was acquired for compelling returns with a passing yield of 9.7 per cent. “We were also attracted to the hotel’s income being derived from both tourist and business markets,” he said.

Cosgrove Group director Banjo Bond

Fronting 46-54 Marine Terrace and 7 Essex St, the Rydges-managed five-level hotel has 300 rooms, conference rooms, two swimming pools, a gym, four food and beverage outlets, and 172 car spaces with EV charging stations. The conferencing facilities are one of only three in the Perth area capable of hosting up to 1,000 guests.

Centuria head of funds management Jesse Curtis said this is a piece of Western Australia’s history and we are proud to have been owners of this iconic Fremantle landmark for more than a decade.

“We received strong interest from the international sales campaign with the Greater Perth area providing compelling economic indicators, from forecast population growth to current high hotel occupancy rates, especially in comparison to other Australian capital cities,” he said.

The Esplanade Hotel in Fremantle was established in about 1875.

“Throughout Centuria’s ownership we’ve undertaken extensive refurbishments to the hotel rooms and we believe we have maximised value for our unitholders, delivering a strong capital appreciation and return to our investors.”

Rydges, who have managed the hotel since 2013, is expected to continue operating the hotel.

Cosgrove Group director Rob Thomas said the group expected to outlay significant capital expenditure enhancing the hotel’s facilities and positioning it for further growth.

“We expect the hotel’s performance to also be underpinned by the lack of new supply coming online in Perth in the near term due to elevated construction costs.”

The property was established in c.1875 as a private residence, Cranworth House, before being transformed into a hotel decades later.

Throughout the ensuing years, the hotel expanded and incorporated a saloon bar. Esplanade Hotel underwent an extensive expansion in the 1980s in anticipation of the 1987 America’s Cup, which fuelled the economic and financial impact on Fremantle, stimulating tourism and investment.

Perth and WA tourism is anticipated to benefit from the $3bn deal between Qantas and Perth Airport announced in May, which will see significant investment in terminal facilities and a new parallel runway. This historic deal will see Perth Airport become the second biggest international gateway behind Sydney.

CBRE’s Aaron Desange and Michael Simpson managed the international sales campaign on behalf of Centuria.

Settlement is expected in the third quarter of 2024.