Swiss asset manager Partners Group has joined forces with Singaporean sovereign wealth fund GIC and Australian hospitality operator Salter Brothers to acquire a portfolio of 11 Travelodge hotels in Australia in a A$620-million ($457.5 million) deal.
The firms will purchase the assets from Australian property group Mirvac and NRMA, a travel company in Australia and New Zealand, according to a Partners Group statement.
The deal marks the largest hotel portfolio transaction in Australia, the statement added.
The portfolio will enable the Swiss investment manager to “gain immediate scale in the sector at a discount to pre-pandemic prices,” according to Rahul Ghai, managing director of private real estate at Partners Group.
The properties include over 2,000 rooms across key metropolitan centres in Australia, including Sydney, Melbourne, and Brisbane.
“Acquiring the portfolio will provide an opportunity to capitalise on the long-term relative value of Australia’s hospitality sector. The portfolio is also set to benefit from a nationwide campaign launched this year that aims to increase domestic tourism,” Partners Group said.
The firm, along with its partners, will improve the utilisation of the hotels through initiatives including rebranding, select upscaling, and widening their visibility through the expansion of loyalty and rewards programmes.
“Although international travel remains restricted, there is some evidence of a steady economic recovery in Australia. Rising rates of vaccination are likely to support the progressive reopening of the economy and bode well for increased room penetration from both domestic and foreign travelers over the course of our investment,” added Euan Kennedy, member of management of Partners Group’s private real estate business.
Mirvac and NRMA announced a plan to offload Travelodge late last year. Once completed, the portfolio will represent Partners Group’s third direct real estate investment in Asia so far this year, the firm said.
An earlier announced transaction was Tokyo-based office property Tama Centre.
The firm’s other private real estate assets in the Asia Pacific include 73 Miller Street, an office building in Sydney that it invested in 2017, and Dinghao Plaza, a mixed-use complex in Beijing (2019).
Partners Group’s real estate business stands at $17 billion in AUM.
In May, the firm roped in Blackstone Real Estate’s managing director Joseph Chien as head of private real estate in Asia, based in Singapore.
Meanwhile, GIC’s involvement in the Travelodge transaction follows another significant partnership in April this year, when the sovereign fund partnered with ESR to acquire the Milestone Logistics portfolio from Blackstone for A$3.8 billion.
In May, GIC said it planned to open its 11th worldwide office in Sydney next year, to focus on investment opportunities in Australia.