Abode Hotel and Apartments Woden in Canberra, Australia Sold for AU$ 41.5 Million

Boutique funds management company Serene Capital has expanded its hospitality portfolio with the $41.5 million acquisition of Canberra’s Abode Hotel and Apartments.

CBRE’s Michael Simpson, Vasso Zographou and Tristan Cotchett negotiated the sale on behalf of Shakespeare Property Group following a competitive Expressions of Interest campaign.

The hotel was sold with a long-term lease to Iconic Hotels under its Abode brand, which is a division of Geocon, Canberra’s larger residential builder-developer.

Mr Zographou said the sale campaign has generated strong interest from a range of international and domestic investors, who were attracted by the long-term lease agreement and high yearly rental increases.

Situated in Canberra’s south, the hotel offers 152 self-contained apartment-style rooms including a one two-bedroom apartment as well as three conference rooms and an all-day dining, inhouse restaurant. It is located on a 1,516sqm Crown-land leased site at 10 Bowes Street, around 10km south of the Canberra CBD and 5km from the parliamentary precinct.

“The Abode offered a lease return, which was attractive from a yield perspective. Underlying this is the strength of the Canberra hotel sector, corporate and Federal Government-related travel as well as significant domestic tourism,” Mr Zographou said.

Shakespeare Property Group Vice President – Hospitality Assets & Investments, Richard Saab, noted, “Abode Hotel and Apartments was the first hotel acquisition for the Shakespeare Property Group and we are pleased to be able to deliver a solid 15.7% IRR net return to our investors. With circa $2 billion of commercial and hotel properties, we considered it timely to sell the asset and redeploy the capital to other investment opportunities.”

The acquisition is the latest for Sydney-based investment manager Serene Capital, which has over $750 million in assets under management and advisory across the hotel and office sectors. This includes an existing Canberra hospitality asset, the Adina Serviced Apartments Canberra Dickson.

Serene Capital CEO and co-founder Glen Boultwood said, “Serene Capital has recently re-opened the Serene Capital Hotel Fund 1 to new wholesale investors with a close date for applications of 30 September 2023 after raising $20 million earlier in the year. We are now starting to see hotel yields and value back at levels when we started the fund back in 2014.”

Mr Boultwood added, “Abode Woden is the 10^th hotel acquired by Serene Capital Hotel Fund 1. The hotel’s defensive demand drivers surrounding government, health, education and infrastructure, combined with the lease income security and high yield add to the defensive nature of the fund’s income stream. Having not invested over the past five years due to the lack of perceived value, our discipline is continuing to pay dividends to new and existing investors in the fund.”