Terrigal Hotel Fetches $3.75m
Sydney Morning Herald
Tuesday June 9, 1998
The Central Coast town of Terrigal has been a centre of action with the sale of Terrigal Pacific, a boutique hotel resort and conference centre, for $3.75 million.
Edamgrove Trust, a Queensland investment consortium, paid $2.8 million for the freehold of the 32-unit property, with Heather and Neil McKellar paying $950,000 for a 25-year lease to operate the resort.
The deal was completed by Graeme Gilson, of Terrigal Pacific Partnerships, through the specialist accommodation agency Resort Brokers. The freehold element has a yield of 11.5 per cent, while the leasehold resort business offers a 37.5 per cent return on annual turnover in excess of $1.7 million.
The Sydney-based manager of Resort Brokers, Reg Saunders, said dividing properties into freehold investment and leasehold components was becoming more popular.
"It broadens the market, offering passive investment opportunities for commercial property investors while giving us the ability to attract good operators who can invest in the accommodation industry without the large outlay required for freehold purchase," he said.
"Terrigal Pacific achieves an average year-round occupancy of 63 per cent, with 55 per cent derived from the leisure market and 45 per cent corporate use."
Terrigal is growing fast as a centre for conferences and resort development, as acknowledged by Gosford Council's decision to spend $8.4 million on sprucing up the town's foreshore.
Medium-density residential development is increasing in the region as a result of the plan, as evidenced by the Satellite Group's announcement in February that it wants to develop a $15 million, 20-unit complex on the ocean front.
In late March, the Hospitality chain, part of the British company Bass, bought the Holiday Inn Crowne Plaza, Terrigal for about $40 million. It plans to add 50 rooms to the hotel's present 200.
The town, which is a two-hour drive from Sydney's CBD, could provide accommodation during the Olympics, as well as enjoy patronage by overseas tourists once the Games are over.
© 1998 Sydney Morning Herald
