GDI buys Newman hotel

GDI Property Group has acquired Newman’s Seasons Hotel for $6.45 million from Ascot Capital, in a bid to cater to the region’s mining sector.

The national property company purchased the 77 Newman Drive asset from Jerry CT Pty Ltd, an investment vehicle wholly owned by Ascot Capital Limited.

Ascot’s directors David Van Der Walt and Greg King are directors of the entity.

GDI purchased the 87-room hotel via its Resource Accommodation Management Co-Living Joint Venture, with a $5.7 million property component and $750,000 business component forming the deal.

The company told the ASX that the RAM Co-Living JV intended to “leverage the successful strategies undertaken at South Hedland”, where it bought two motels for $27 million last year.

GDI said it planned to “immediately pivot the offering to the resource sector” which would include increasing the hours of operation of the kitchen to better suit mining sector employees.

“With a number of new or expansion mining projects announced within the Newman catchment, we anticipate this strategy will lead to higher occupancy and consequentially, earning, and exceed the 20 per cent return hurdle,” GDI said in a statement.

The property sits on a 29,000 square metre area, with potential to expand by up to 80 additional rooms.

The RAM Co-Living JV will fund the purchase via cash reserves and a new debt facility to be secured against its properties in South Hedland and Norseman.

The deal comes as Ascot Capital looks to sell down its hotel portfolio, following the divestment of a majority of its industrial assets.

The Nedlands-based fund manager was brought into focus in late 2021, when Dexus bought its Jandakot Airport asset for $1.3 billion.

The acquisition is expected to settle shortly, subject to council approval.

The property was sold off market, with the deal brokered by CBRE’s Ryan McGinnity and Chloe Mason.