Moelis locks up Taylor Square with Kinselas buy
Moelis Australia has exchanged contracts on Kinselas Hotel on Darlinghurst’s Taylor Square for $45 million. It follows on from the recently announced purchase of the Courthouse Hotel three doors down.
The cumulative purchase price for the two hotels and the adjoining to shopfronts in between was $67 million, giving Moelis ownership of the entire Taylor Square block, with plans to create a new hospitality precinct in what has long been considered one of Sydney’s premiere entertainment hubs. Both hotels will be acquired by the MA Taylor Square Fund which will be a standalone unlisted fund managed by Moelis Australia Hotel Management (MAHM).
“Both venues in their own right are quality freehold going concern assets that will benefit from our platform expertise and the reopening of Sydney following the repealing of lockout laws back in January,” stated MAHM CEO Dan Brady.
Kinselas Hotel was purchased off Universal Hotels, which has owned the hotel since 2017, when they paid $23m for the pub. After also putting in a bid for the Courthouse Hotel with the hopes of owning both venues, Universal Hotels approached Moelis with the offer to acquire Kinselas and effectively own the whole block.
“It was hard to part with Kinselas, especially as we have another three venues in the precinct and are so involved with the community,” stated managing director Jim Kospetas.
“Our vision was to always acquire the Courthouse Hotel and merge Kinselas into one amazing and iconic destination. After being the underbidder on the Courthouse sale to Moelis, it was only right to share our vision and offer Moelis the opportunity. We congratulate Moelis and wish them all the best!”
Moelis are now looking at ways in which it can create a reinvigorated hospitality precinct on Taylor Square, and has the backing of the City of Sydney to do so.
“We’re excited by the way in which we can bring hospitality to life. Certainly now with having that site consolidated, we can look at it as a blank canvas as to how we can build out something very exciting through those venues either separately or together by providing a hospitality precinct right on Taylor Square. This really aligns with the City of Sydney’s vision of revitalising the city’s nightlife and, in that particular area, growing the creative industries which we’re really excited about,” Brady told Australian Hotelier.
As an unlisted fund, the MA Taylor Square Fund is utilising a new investment platform model that allows both Moelis Australia clients MAHM management to invest in the hotels.
“These sorts of funds not only allow for investors to come in and participate, but also allow for co-investment both from management of MAHM and managers on the ground, with the opportunity for equity ownership there. That’s the model and its very much skewed to getting performance, with the main focus around communities and ensuring that exceptional hospitality is being reached through these funds,” explained Brady.
MAHM’s other unlisted fund is the Beach Hotel Byron Bay fund, which was settled at the beginning of the year for $104m.
Brady confirmed that MAHM is set to invest “similar and significant amounts of capital” on both the Courthouse and Kinselas Hotels in their own ways, in an effort to further enrich Sydney’s nightlife in the area.
Both the Kinselas and Courthouse Hotels are expected to settle in February 2021.