Sofitel Adelaide on the sale block just months after opening as bids roll in

Adelaide’s first five star hotel to open in decades is up for sale just months after opening as investors clamour for a piece of the action.

The Garcon Bleu restaurant in the Sofitel Adelaide.

Sofitel Adelaide is up for sale, with bids in the $160m price range expected for the property, which only opened for trade in November.

The Palumbo Group’s Daniel Palumbo said his family, which developed the French-inspired property, had intended to hold onto it longer-term, but had recently decided to test the market following “several unsolicited offers’’.

The Sofitel, on Currie St in the CBD, has 251 rooms and is operated by the Accor Group.

It is part of a wider 32 storey development including the 69 Luminesque apartments, which occupy the top eight floors.

The Sofitel Adelaide on Currie St.

It was the first new five star hotel to open in Adelaide since the Intercontinental was completed 30 years ago, with its decor borrowing heavily from the Sofitel brand’s French roots. The hotel also includes French restaurant Garcon Bleu.

CBRE Hotels’ Michael Simpson and Tom Gibson, along with Savills’ Nick Lower and Rob Williamson are running the sale campaign.

Mr Simpson said interest from domestic investment managers, offshore funds and private equity investors was expected, with many Adelaide hotels booking their strongest monthly performances on record in March and April this year.

“While Adelaide previously had a hotel rate ceiling, the development of the Mayfair Hotel, Eos by SkyCity and now the Sofitel has materially improved the city’s hotel product, amid a surge in domestic travel,” Mr Simpson said.

Developer Daniel Palumbo and his mother Maria at the top of the Sofitel hotel on Currie Street. Picture: Tom Huntley

“The Sofitel is a world-class, five-star product which is right-sized for the market at 251 rooms and benefits from the meticulous care taken by the Palumbo family to deliver a stunning property with a strong design aesthetic.”

The sale is expected to land in the vicinity of $650,000 per key.

Mr Lower said the site was already outperforming and offered further operational upside.

“Seeing South Australia continue to improve as a tourism destination, and with domestic travel continuing to soar, the Sofitel offers a five-star product, which has been a gap in the market for some time,” Mr Lower said.

“The hotel is already outperforming and there is further operational upside as the property continues to establish itself and as the ground floor retail spaces and adjoining laneway are activated.”