Hotel Lindrum, Melbourne Sold for Approximately A$50m
Famous Melbourne CBD east end hotel changes hands, primed for the next stage of evolution
JLL sells Hotel Lindrum following a competitive international campaign, highlighting the ongoing demand from buyers looking to redevelop and transform hotels in prime locations
MELBOURNE, 29 March 2022 – One of Melbourne’s most iconic hotels, originally named in honour of former world champion billiards player Walter Lindrum, has sold for around $50 million following a sales campaign which generated strong interest from local, interstate and overseas players.
JLL’s Victorian Capital Markets and Hotels & Hospitality Group’s respective head’s Josh Rutman and Peter Harper, along with colleagues Nick MacFie and Mingxuan Li, marketed Hotel Lindrum, which is situated at 26-30 Flinders Street, via an international Expressions-Of-Interest campaign.
The campaign attracted interest from groups looking to refurbish the hotel for its next era as well residential, hotel and commercial developers and generated more than 200 inquiries which led to several formal offers being received by JLL.
JLL’s Executive Director and Head of Capital Markets, Josh Rutman said, “Hotel Lindrum is one of Melbourne’s most recognised buildings and will now become one of the city’s first major revitalisation developments for 2022. The depth of interest in such a high-quality offering was not surprising, however we were taken aback by the number of new market entrants who flagged their intention to buy the property.”
“It is yet another demonstration the confidence in the resurgence of the Melbourne CBD market, particularly for well-located investment and development opportunities which are well placed to capitalise on the rebound,” he said.
Hotel Lindrum is the most recent example of well prime located hotel buildings being sold for major redevelopment or repositioning.
Most notably, JLL brokered the sale of the “Bayview on the Park” hotel located at 50-52 Queens Road, with the sale marking one of the largest inner city land deals for 2021. The hotel site will make way for a major build-to-rent project with over 300 rental units.
There were a number of other hotels across the country that were sold for redevelopment or alternative use in 2021, the largest of which being the Vibe Rushcutters.
JLL’s Managing Director and Head of Investment Sales Australasia, Hotels & Hospitality Group Peter Harper said, “These sales highlight a trend we are seeing Australia wide for hotels in prime locations where the underlying land value points to a higher and better use. Developers and alternative use players are looking to capitalise on the redevelopment or conversion value that assets offer, which is particularly the case in Melbourne where the volume of stock in the current new supply cycle will make it very difficult for some existing hotels to remain competitive and profitable.”
“Having said that, Hotel Lindrum also attracted considerable interest and bids from a range of hotel investors that wanted to reposition the asset into one of Australia’s preeminent luxury boutique hotels. Given the various levels of uncertainty that exist as markets move through the post-COVID recovery phase, there is a clear focus on location, quality of build and value-add potential when investors are reviewing investment opportunities. Hotel Lindrum ticked all these boxes,” Mr Harper said.
Hotel Lindrum encompasses 59-room boutique hotel rooms, a restaurant, bar, and feature billiards table. Operated under a hotel management agreement with Accor’s M-Gallery by Sofitel brand, the property sits at the doorstep of many of Melbourne’s key room night demand generators.
However, buyers were also offered the opportunity to take advantage of a planning permit for a 30-level mixed use development comprising 77 hotel rooms and 68 residential apartments (STCA) with the original façade to be retained.
Following a full conversion of the former pool hall, the hotel first opened its doors in 1999, and was amongst one of the first boutique hotels to enter the market at the time.