A Northern Territory hotel has been sold in an off-market transaction by agents of Colliers International, who say that the deal demonstrates confidence in the local market.

The waterfront Novotel Atrium at 100 The Esplanade, Darwin, fronting Darwin Harbour, was sold on behalf of vendor Tourism Property Investment Group to Darwin-based Halikos Group.

It is understood that the $24 million deal is in line with the Group’s strategy to appropriately refresh its property portfolio and seek prudent investments within the Northern Territory.

Under the contract of sale, Halikos Group entered into a 17 year management agreement with Accor, the current operators of the hotel.

Colliers International national director of hotels and leisure, Michael Thomson, said that the Novotel Atrium was the second largest Darwin CBD sale this year, as well as one of the few hotel transactions in Australia for 2009.

“The sale resulted in a good outcome for both the vendor and the purchaser, and illustrates the confidence local investors have in the Darwin hotel market, which experienced a 9.1% increase in demand as revealed recently by the Australian Bureau of Statistics up to March 2009,” said Mr Thomson.

“In the same period average room rates increased by 9.4%, one of the best results in the country.”

Mr Thomson added that the sale reflected a value per room of $171,428, a new record for Darwin, albeit on an approximate double digit yield.

Colliers International Darwin director, Chris Deutrom, said that the 4.5 star Novotel Atrium comprises is one of the City’s most prominent hotels with 140 guest rooms, and that there had been significant local interest in the property for a number of years.

“Darwin’s economic and social growth surged when the City’s Convention Centre opened in 2008, and this is expected to continue with the development of the proposed $23 billion INPEX Gas Line, which will be the largest single private sector investment in Australia,” said Mr Deutrom.

“Darwin appears to have been relatively insulated from the impacts of the global financial crisis due to the strength of the local economy, and there has been a distinct lack of stock come on to the market in the region this year which resulted in a large drop in sales activity for the first half of 2009.”

“Recent Colliers International research shows there was only one major sale within the Darwin CBD in the last quarter, ending June 2009, which was NT House when it sold for $38.75 million, and a handful of smaller scale commercial property sales. All were to local buyers.”

“With Novotel Atrium now sold, we anticipate that good levels of interest in commercial property will continue for the rest of the year due to a lack of new stock coming on to the market, and any property that does will be hotly contested, as we have just witnessed.”

by Mark Bristow : Monday, September 28, 2009