SOUTH Australian family-owned development company the Palumbo Group is testing the hotel investment market post-COVID restrictions by putting the Sofitel Adelaide on the market.
The newly opened Sofitel Adelaide on Currie Street is the city of churches’ first new five-star hotel since the completion of the Intercontinental 30 years ago.
Operated by Accor, the 251-room hotel opened in November as part of a 32-storey tower development, which includes The Luminesque apartments.
CBRE Hotels’ Michael Simpson and Tom Gibson in conjunction with Savills’ Nick Lower and Rob Williamson are handling the sale campaign.
Palumbo Group managing director Daniel Palumbo said the family had initially intended to hold the hotel longer term but had decided to test the market after receiving several unsolicited offers.
Simpson said interest from domestic investment managers, offshore funds and private equity investors is expected.
He added that many Adelaide hotels had experienced their strongest ever monthly hotel performances in March and April this year.
“While Adelaide previously had a hotel rate ceiling, the development of the Mayfair Hotel, Eos by SkyCity and now the Sofitel has materially improved the city’s hotel product, amid a surge in domestic travel.
“The Sofitel is a world-class, five-star product which is right-sized for the market at 251 rooms and benefits from the meticulous care taken by the Palumbo family to deliver a stunning property with a strong design aesthetic,” he continued.
Lower said the Sofitel was already outperforming and offered further operational upside, with no competing stock being developed in the CBD in the short term.
“Seeing South Australia continue to improve as a tourism destination, and with domestic travel continuing to soar, the Sofitel offers a five-star product, which has been a gap in the market for some time,” Lower said. “The hotel is already outperforming and there is further operational upside as the property continues to establish itself and as the ground floor retail spaces and adjoining laneway are activated.”