Hotels and resorts operator Oaks Hotels & Resorts has bought the management letting rights in five properties for $15.1 million in Australia and New Zealand.
The five properties portfolio will add an around 730 serviced apartments to Oak’s pool, Oak currently has 526 apartments in its portfolio.
The group is expected to settle 445 apartments by June 30, 2007.
The MLRs to be acquired under Oaks include 253 keys in Felix Street Apartments, a 4.5 star hotel in Brisbane CBD.
The company has also entered into a put & call option deed over 212 Margaret Street in Brisbane CBD. The 4.5 star has 135 apartments.
In Townsville, Oaks will acquire MLRs to 46 apartments in Anchorage apartments from the developer, Hedley Developments. The Anchorage apartments are situated in Mcllwraith Street, a prime waterfront location in South Townsville.
In Port Stephens, Oaks will buy 127 apartments from Pacific Blue Australia, the developer of the Pacific Blue Apartments at Salamander Bay in New South Wales.
The Pacific Blue Apartments are expected to be open by December 2007.
Aurora said that the legal dispute surrounding the acquisition of the MLRs for the Aurora apartments in Brisbane is continuing.
In New Zealand, Oaks has signed a contract to buy MLRs for 171 apartments in Cashel Street, Christchurch. Cashel Street is a new four star property that opened in January 2006 under the Unilodge banner.
Oaks’ managing director Brett Pointon said the acquisitions would provide Oaks with first-up representations in the key regional markets of Townsville and Port Stephens as well as further bolstering the group’s existing presence in the Brisbane CBD and New Zealand.
“Our forward growth blueprint will see us continuing to focus on CBD centres, areas that are undersupplied with 4 to 5 star apartment hotels and resorts and in localities where strata titled development is emerging.
“We’re also confident of growing our accommodation portfolio through securing the letting rights to additional apartments in our existing properties. We currently manage around 67% of the available letting stock in these properties and are confident of lifting this rate in the year ahead,” he added.
Oaks is also looking to buy a further 370 apartments at Lagoons in Port Douglas, Residences in Auckland and Lure in Port Stephens.
The company is close to completing negotiations for the acquisition of the MLRs within a 145 apartment resort in regional NSW.
All of the new acquisitions are expected to increase Oaks serviced letting pool from 2,277 currently to around 3,237 apartments and the total number of properties managed to 32 by June 30, 2007.
Looking ahead, Pointon said Oaks was on line to meet its forecast statutory net profit after tax of $3.2 million for the period from December 22, 2006 to June 30, 2006 based on its year to date performance.
“Since listing we have significantly strengthened our representation throughout Australia and consolidated an emerging presence in New Zealand, and on the back of our planned expansion in 2007, are confident of achieving the previously forecast earnings for FY 2007”, he said.
The investment will be debt financed under existing facilities.
By Kathryn O’Meara
