Redcape acquires three more hotels

18 October, 2018 by Andy Young

The Redcape Hotel Group has acquired three hotels south of Sydney, ahead of its pending $1bn-plus listing on the Australian Securities Exchange (ASX), which is set to happen in early December.

The group has bought the portfolio of hotels from private consortium Denfish Hotels, with HTL Property acting as exclusive agents for the transaction. The deal includes the Central Hotel in Shellharbour, the Figtree Hotel and Unanderra Hotel, which Denfish Hotels had brought together under its umbrella over a 10-year period.

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Speaking about the deal, HTL Property Asia Pacific Director, Andrew Jolliffe said: “Synthesizing hospitality based properties is a highly sought after strategic and commercial objective, allowing the successful geographical aggregator to streamline the efficiencies of both human and financial resource allocation.

“Redcape have assessed this portfolio over a long period of time, however it hasn’t been until now that a deal structure could be agreed that was both effective and efficient for both parties.”

Although the details of the deal have not been revealed, the purchases increase Redcape’s portfolio to 32 hotels. The plan to list Redcape on the ASX is being overseen by the group’s manager Moelis along with Ord Minnett and comes just over a year after one of the funds managed by Moelis paid $677m to acquire the group. https://www.theshout.com.au/news/pub-news/redcape-sells-to-moelis-australia/

The three large format hotels in this deal are similar to many of the other hotels within Redcape’s portfolio and speaking on behalf of Denfish, shareholder Joel Fisher said he and his investment partners felt it was the right time to sell.

“In effect, we commenced a consolidated portfolio exit process nearly two years ago when our partnership sold the Corrimal Hotel to Peak Investments, and the recent divestment of the balance of the portfolio highlights the conclusion of our vehicle’s investment cycle” said Fisher.

“This is a significant step for us to sell the balance of the hotels in one line, but having known and respected for many years the Redcape team as we do, we are happy to pass the reins on to them and have no doubt they will add their distinctive and successful mark to the portfolio; and take the assets forward over time.”

The sale is the latest by newly formed brokage company HTL and National Pubs Director Dan Dragicevich said the market continues to reward strategic investors and well managed operators.

“In the past two months alone, we have sold in excess of $250m worth of A grade hotel property, and expect to manage the sale of a similar or even greater value level across the Eastern States between now and the end of the Calendar Year” said Dragicevich.

“Demand from our unique network of buy-side clients remains unquenched, and HTL Property operatives around the nation all report increasing levels of activity and deal flow regarding A Grade property holdings. We stay close to our market place, and our receptors indicate a strengthening national deal landscape.”