Banjo Bond to buy Esplanade Hotel

Banjo Bond to buy Esplanade Hotel

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Banjo Bond’s Cosgrove Group is set to purchase Fremantle’s Esplanade Hotel and adjacent car park for $116.5 million from Centuria Capital Group, with plans to revitalise the asset.

A heads of agreement has been signed over the Marine Terrace hotel, which Primewest bought in 2012 for $88.5 million from Marylyn New.

Primewest was absorbed into Centuria Capital Group in late 2022, following a $600 million merger between the entities.

In a recent information memorandum, Cosgrove Group offered its investors a chance to co-invest in the hotel and its operating business, as well as an adjacent two-storey carpark.

The hotel is being purchased for $101.5 million, with the remaining $15 million to be spent on buying the carpark.

The company described the hotel as a “rarely traded, trophy asset in the heart of Fremantle” comprising 300 rooms, across four levels, with conference facilities and food and beverage offerings.

Cosgrove says in its IM that it will spend $12.5 million on refurbishing the property within the first 24 months of ownership, to upgrade conferencing facilities and some rooms.

Cosgrove Group’s directors, which include Primewest co-founders John Bond, David Schwartz and Jim Litis, related entities, and Rydges Hotels parent company EVT Ltd will co-invest 25 per cent of the total equity required for the acquisition.

Rydges is the current operator of the hotel.

Banjo Bond and Rob Thomas are the founding directors of Cosgrove Property Group, and run the day-to-day operations of the company.

Primewest co-founder John Bond is Banjo Bond’s father and Alan Bond’s son.

Marylyn New, the daughter of Midland Brick founder Ric New, bought the asset for $12.75 million out of receivership in the early 1990s, and upgraded the hotel.

The Esplanade Hotel was also part of the restoration of Fremantle for the 1987 America’s Cup, which Alan Bond won four years prior.   

Cosgrove is acquiring the hotel on a 9.7 per cent passing yield and at 45 per cent below the building’s replacement cost.

The company expects the asset to increase in value in years to come, with capital improvements coupled with low supply of new hotels in Perth.

In its marketing material for the property, CBRE said the hotel’s owners were looking to capitalise on strong investor demand for large scale hospitality assets across Australia.

CBRE’s Aaron Desange and Michael Simpson managed the sale via an expressions of interest process.

Business News understands more than a dozen offers were made on the property.  

Centuria Capital Group or Cosgrove Group could not comment on the sale.

The sale contract is expected to be signed within the next three weeks.

 

 

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