Contact: Amanda Kennedy
Deloitte
Media and Communications Manager
0418 806 477

Contact: Sal Algeri
Deloitte
Partner
(03) 9208 7210

Contact: David Lombe
Deloitte
Partner
(02) 9322 7400

Pacific Hotels Market Street Pty Ltd has been purchased by Oaks Hotels & Resorts (Vic) Pty Ltd in an aggressive move by the Oaks Group to build their Melbourne portfolio.

The result is that 60 Market Street will now be managed under the Oaks brand instead of Pacific Hotels International.

Receivers and Managers of 60 Market Street, Deloitte Partners Sal Algeri and David Lombe, said that although they had not been party to negotiations, they expected purchasers to be pleased with the move.

"Oaks have a successful 15-year reputation in the hotel management business, particularly with inner-city apartment hotel operations," Mr Algeri said.

"Since floating on the ASX in January this year, Oaks’ market capitalisation has increased from $130 million to $200 million and their portfolio continues to grow.

"ABN Amro Morgans’ research paper on the Oaks IPO said Oaks had an average occupancy rate of about 78 per cent which outstripped the industry average of 63 per cent.

"Their apartment hotel in Collins Street, which has only been operating for six months, is already at higher than average occupancy levels."

Mr Algeri said the change does not in any way impact the contractual documentation in place with apartment purchasers, in particular the lease term and the rental returns remain unchanged.

"We expect to receive the certificate of occupancy by the end of July with no further delays foreseen, which is four weeks earlier than previously anticipated.

"Settlement of the hotel apartments should therefore take place from mid-August to September."

Background

Richland Investments (Australia) Pty Ltd, the 100 per cent shareholder of Pacific Hotel Market Street Pty Ltd and the contracted tenant of 60 Market Street, has exercised their right to sell their shareholding.

They have sold their shareholding to Oaks Hotels & Resorts (Vic) Pty Ltd, part of the ASX-listed Oaks Group.

The change occurred as a consequence of negotiations between the two parties, of which the Receivers were not a party.

The development deed allows for a change of hotel management and does not require the consent of the Receivers.