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News release

Melbourne

New beginnings for The Palace Hotel

505 City Road, South Melbourne


MELBOURNE, 18 SEPTEMBER 2012 – Turning on its old Victorian charm, The Palace Hotel in South Melbourne has been purchased by a private investor.

Jones Lang LaSalle’s Robert Butera and Mathew George sold the property on behalf of Cloverfield Pty Ltd for $2.55 million representing an initial passing yield of 8%.
 
Prominently located on the main thoroughfare of 505 City Road, South Melbourne with three street frontages and only metres from the bay and vibrant Bay Street precinct, the 2 level building of approximately 460sqm comprises a main bar, restaurant, function rooms and outdoor area.
 
Recently re-branded ‘The Soho’, the hotel has undergone a major refurbishment in recent years in the order of $1 million with its grand opening in late September.
 
Zoned Residential 1 with a total land area of approximately 573sqm, the property is ideal for future re-development.
 
Mr Butera said “the property sold itself – it ticked all the boxes.  The purchaser was attracted to its prominent unrivalled location in close proximity to the CBD, South Melbourne Market and literally 50 metres from the Bay Street retail precinct.  The combination of its old Victorian charm exterior and first class internal modern fitout enhanced its appeal, as did the three street frontages and future residential redevelopment potential.”
 
“With its long term lease, excellent public transport linkages, and only a short walk to the bay, there hasn’t been many opportunities in the current market comparable to this” Mr Butera added.
 
Mr George said “appetite for hotel assets in the city fringe and in particular the bay side suburbs of Port Melbourne and South Melbourne has increased significantly over the past 12 months with the recent flurry of sales activity of Bells Hotel, the Town Hall Hotel, the Clarendon, Motel, O’Connells, the Prince Alfred and the Fleece.  Another high profile asset to exchange in recent times has been the businesses at The Prince in neighbouring St. Kilda.”
 
“The area has been a magnet for investors and hotel operators due to its location to the CBD, local amenity and rapid transformation into being one of the more desirable locations to reside, matched with its high levels of disposable income” said Mr George.
 
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