Grand Hotel Group selling Portfolio of Three Freehold Investment Hotels in Australia

The Grand Hotel Group has appointed Jones Lang LaSalle Hotels as exclusive agents to offer for sale a portfolio of three freehold investment hotels. Strategically located along Australia's eastern seaboard under lease agreements to Rendezvous Hotels Group, the properties include The Marque Hotel Brisbane, The Marque Hotel Sydney and The Marque Hotel Canberra.

"Due to the three Marque hotels not being a strategic fit with GHG's five star hotel business model, the new board of GHG approved the sale of the three substantial Marque hotels," said Mr Mark Durran, Executive Vice President, Jones Lang LaSalle Hotels.

The 290 room Marque hotel portfolio provides an incoming investor with a portfolio of well located investment properties offering the security of a long term lease, substantial base rent and further upside potential through the turnover. "Rendezvous has committed to spend over A$5.5 million to bring the properties up to four star contemporary hotel standards," said Mr Durran.

The sale of the portfolio comes as room yields around Australia reach record levels, boosted by strong occupancies. "This is a very rare opportunity for an investor to acquire a portfolio of quality hotels in three major Australian capital cities all showing clear signs of continued improvement," said Mr Durran.

"The high barriers to entry and growth potential in hotel trading performance are likely to attract significant interest in the 113 room Marque Hotel Sydney," said Mr Durran. The 965sqm site is situated opposite Sydney's Central Railway Station and enjoys three street frontages.

Sydney recently achieved the highest quarterly occupancy and Average Daily Rates (ADR) levels on record. "In regards to hotel trading performance, Sydney has improved significantly and with occupancies expected to remain high on the back of consistent demand growth, Rendezvous has an opportunity to push room rates higher post refurbishment which will flow through to the incoming investor in turnover rent," said Mr Marcello Jimenez, Vice President, Jones Lang LaSalle Hotels.

The Marque Hotel Brisbane is a 16 level 99 room hotel located in the heart of the CBD. "Brisbane is one of Australia's best performing hotel investment markets and our research indicates that occupancies should stay high at around 78-80% and ADR growth will remain strong," said Mr Durran. He added, "With the Brisbane market likely to continue to record strong room yield growth over the next five years and with the hotels inherent redevelopment potential, investor interest in this particular property is expected to be strong."

The Marque Hotel Canberra is situated on a 6,270sqm Crown leasehold site on the prominent Northbourne Avenue. Whilst Canberra's hotel market is presently the second best performing market in Australia with room yield growth of 19.7% during the March quarter 2007, the 78 room low rise hotel also shows substantial residential development potential. "We expect local and national developers to be particularly interested given the large parcel of land," said Mr Jimenez.

GHG is an Australian based hotel owner with approximately A$650 million of assets, including four hotels under management agreements with Hyatt International. In March 2007 Morgan Stanley and Tuan Sing (GHG's previous largest shareholder) were successful in a take over of GHG and subsequently delisted it from the ASX.

The hotels are being offered for sale individually or in one line via an Expressions of Interest campaign closing Midday Tuesday 14 August 2007.

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