Two new Mercure-branded hotels in regional Victoria are being offered for sale at prices below replacement cost after the developer who built them was placed into receivership owing at least $22.6 million.
Mercure Hotel Bairnsdale and Mercure Horsham are expected to fetch at least $11 million in an expression of interest sales campaign initiated on behalf of receivers and managers KPMG.
The listings come as the number of distressed assets being put on the market in Victoria soared by 56 per cent in 2012, according to Colliers International.
The two properties on opposite sides of the state are being offered jointly or separately, with the 51-room Bairnsdale property quoted at $5 million-plus and the 52-room Horsham hotel with an asking price of $6 million-plus.
"We'll probably be selling them at under what the replacement cost is," said Jeremy Gruzewski, Victorian head of insolvency property services for Colliers International. "Both hotels were built in the last two years and are running at a profit."
The Horsham property generated $1.74 million in revenue in the past financial year, while the Bairnsdale property generated $1.55 million.
The hotels have been listed for sale after two companies owned by hotelier William Berry Thompson were placed into administration earlier this year.
KPMG has refused to disclose the valuations of the properties or the amounts owed by Bairnsdale Property Pty Ltd and Horsham International Property Pty Ltd in documents submitted to ASIC, citing its "commercially sensitive nature" that "may adversely impact the realisation of the company's assets".
However, documents filed by trustee Tasmanian Perpetual show the two properties were used as security to borrow at least $22.6 million. Several other companies are also in administration, including two that own Mercure hotels in Launceston and Hobart.
"It was other property holdings that brought [the companies] down, these were held as security," Mr Gruzewski said.
Colliers International's Insolvency and Distressed Assets report found that the number of distressed assets on the market soared 56 per cent to 95 in 2012. Industrial assets accounted for about 40 per cent of these properties.