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Case Study

Tannum Sands Hotel Motel, Gladstone - A true understanding of an asset and its potential

The Tannum Sands Hotel is located in Gladstone a regional commodities driven economy. With a positive trading growth pattern and potential development flexibility, the business and asset strength needed to be communicated with a ‘future outlook’ as the core proposition, bearing in mind the extremely high price point required for the Vendor.
 
We identified immediately that this asset would appeal to a variety of buyer targets including traditional hotel or portfolio owners, high net worth individuals, developers and mining companies. Nationally we executed a marketing strategy to engage all prospective groups and tailor a specific marketing message to each. As an example, we attended a mining expo and advertised in the monthly Oil and Gas Magazine (Back cover).
 
Identifying the Gladstone region as having less than 1% rental vacancy rate and mining companies buying leases on hotels, we advertised the asset as an immediate accommodation solution to the mining workforces whilst having a holding income. To eliminate any purchase barriers from non-traditional pub owners, we also had genuine strong offers to lease the business from traditional pub owners short or long term.
 
Our communication and asset positioning strategy created strong market tension and negated the traditional operator mentality of applying a “regional hotel yield to a current EBITDA”. A total of eight EOI’s were received from four different states and ranged across all buyer pools including private equity, mining accommodation operators and hoteliers, demonstrating our firm’s National and corporate reach. We were able to achieve a record result on the asset for the client with an end sale price of $27.25 million and a sub 10% passing yield.​

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