Mercure in distressed sales
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.
cvedelago@theage.com.au
Twitter: @chrisvedelago
Frequently Asked Questions about this Article…
Two Mercure-branded hotels are listed for sale in regional Victoria: Mercure Hotel Bairnsdale (51 rooms) and Mercure Horsham (52 rooms). They’re being offered by receivers and managers acting on behalf of the lender.
The hotels are being sold after the developer who built them was placed into receivership. Colliers' Victorian insolvency head Jeremy Gruzewski said they’ll probably be sold for less than replacement cost despite being recently built and profitable.
The Bairnsdale property is quoted at about $5 million-plus and the Horsham hotel at about $6 million-plus. The two properties are expected to fetch at least $11 million in the sales campaign.
Yes — both hotels were built in the last two years and are reported to be running at a profit. In the past financial year Mercure Horsham generated $1.74 million in revenue and Mercure Bairnsdale generated $1.55 million.
Receivers and managers KPMG are running the expression-of-interest sales campaign. Documents filed by trustee Tasmanian Perpetual show the two properties were used as security to borrow at least $22.6 million, though KPMG has declined to disclose valuations or the exact amounts owed, citing commercial sensitivity.
The listings state the two hotels are being offered either jointly or separately, so interested buyers can bid for both properties together or for each hotel on its own.
Yes. The article notes that several other companies are also in administration, including two that own Mercure hotels in Launceston and Hobart, indicating the issue isn’t limited to the Bairnsdale and Horsham properties.
Colliers International reported distressed assets on the market in Victoria rose 56% to 95 in 2012, with industrial assets making up about 40% of that total. For investors, a rising supply of distressed properties can create buying opportunities but also reflects broader market stress and potential risks around secured debt and property holdings.
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