Adelphi Hotel - 187 Flinders Lane, Melbourne

Introduction

JLL Hotels & Hospitality and CVA Property Consultants, as exclusive selling agents, are pleased to present for sale Melbourne’s best boutique hotel and the jewel of Flinders Lane, Adelphi Hotel (the “Hotel” or the “Property”).

Located at 187 Flinders Lane in the thriving and world-renowned entertainment precinct of Melbourne, Adelphi Hotel features 34 bespoke guest rooms, rooftop pool and bar/events venue, cocktail bar, boardroom as well as a lower ground restaurant leased to NOMAD Melbourne.

As one of only a very few freestanding freehold hotels in Melbourne as well as being located in the highly sought-after and extremely tightly held ‘Paris End’ of the CBD, Adelphi Hotel provides enormous opportunity for further enhancement, especially given the availability of vacant possession of management.

Since opening, Adelphi Hotel has benefitted from an exceptional reputation having won Victoria’s Best Boutique Hotel Award a staggering four times. Now ready for a new breath of life, the opportunity to further enhance this reputation and capitalise on the immediate precinct through refurbishment or repositioning is endless. Not only does the property benefit from having one of the best restaurants in Melbourne in the basement, it is also proximate to some of Melbourne’s best dining experiences including Gimlet at Cavendish House, Supernormal, Kisumé, Coda, Chin Chin, MoVida and many more. The hotel is moments away from the Collins Street high end fashion precinct which features Chanel, Gucci, Louis Vuitton, Harrolds, Monards, Cartier and Bulgari.

The sale of the Adelphi Hotel provides a very rare chance to obtain an investment foothold in the best part of the Melbourne CBD, with a number of upside opportunities available.

The property is being offered for sale via Expressions of Interest closing Thursday 27 April at 2pm (AEST).

For further information regarding this opportunity, please contact the exclusive selling agents.

PETER HARPER

Managing Director

Head of Investment Sales - Australasia

M +61 412 560 246

E Peter.Harper@jll.com

NICK MACFIE

Vice President

Investment Sales

M +61 415 673 197

E Nick.MacFie@jll.com

CHARLES CINI

Chief Executive Officer

CVA Property Consultants

M +61 411 423 389

E charles.cini@cva.melbourne

IAN ANGELICO

Managing Director - Agency

CVA Property Consultants

M +61 418 336 088

E ian.angelico@cva.melbourne

Executive Summary

Property Adelphi Hotel

Address 187 Flinders Lane, Melbourne VIC 3000

Tenure Freehold

Land Area 366sqm*

Frontage Flinders Lane: 7.62m* Side lane: 48.06m*

Gross Floor Area 2,865sqm* (Nett of lift cores and stairwells)

Accommodation 34 guest rooms and suites

Food & Beverage Om Nom Cocktail Bar Vacant rooftop bar/events venue (previously Mon Bijou) NOMAD Restaurant (leased to third party tenant)

Conference & Events Boardroom with seating for up to 12 guests (45sqm)

Amenities & Facilities Rooftop pool & bar area, sauna & two private laneway car parks

Management Vacant possession of management available

Sale Process For Sale via Expressions of Interest

*Approx.

Investment Highlights

MELBOURNE’S BEST BOUTIQUE HOTEL

Melbourne is internationally regarded as the cultural capital of Australia. Upon opening, The Adelphi Hotel not only embodied the reputation of the city but also pioneered the boutique hotel sector, both locally and nationally.

Since its inception, the Adelphi has continuously been recognised by travellers as the best boutique hotel in the city and this has been reinforced by numerous industry awards including winning Victoria’s Best Boutique Hotel Award four times.

FREESTANDING FREEHOLD IN THE ‘PARIS END’

The ‘Paris End’ of the Melbourne CBD is a relatively small precinct of the city that is home to the most coveted and tightly held real estate in Melbourne, be it hotel, retail, commercial or residential. Many of Melbourne’s landmark and most iconic buildings are in this precinct.

To not only occupy such a prestigious address, but also be a freestanding building on freehold title, makes this property such a rare investment proposition.

SITUATED AT THE HEART OF MELBOURNE’S PREMIER ENTERTAINMENT PRECINCT

Hermes, Louis Vuitton, Fendi, Chanel, Prada, Versace, Dior, Gimlet, NOMAD, Grill Americano, Supernormal, Coda, Kisumé, MoVida, Forum Melbourne, Regent Theatre - the absolute best of Melbourne’s retail, dining and entertainment options at the doorstep of The Adelphi.

Together with being just minutes’ walk to Melbourne & Olympic Parks, Federation Square, Flinders Street Station, the new Metro Tunnel Town Hall Station and Bourke Street Mall, the hotel truly benefits from the highest yielding demand segments.

ENORMOUS UPSIDE POTENTIAL

The Adelphi Hotel operation and the rooftop bar/events space (currently closed) have essentially been operating separately for several years. Stapling the two components back together should immediately have a positive impact on both components.

Furthermore, a strong case can be made for significant trading uplift through cosmetic enhancements to the guest rooms or leveraging an existing operation to improve departmental and undistributed expenses.

Alternatively, the built form characteristics of the property lend itself to a conversion into Melbourne’s hottest entertainment venue - think The Establishment in Sydney - or even commercial or residential. Just like the opportunities these properties present, the upside could be enormous.

VACANT POSSESSION OF MANAGEMENT AVAILABLE

Offered with vacant possession of management, an incoming purchaser has the ability to continue the Adelphi brand’s incredible legacy or reposition and rebrand to better suit an existing operation or portfolio.

Otherwise, the flexibility this operating structure provides allows the opportunity to get creative and utilise the property’s excellent fundamentals through an alternative use.

FLINDERS

Property Description

Adelphi Hotel features 34 guest rooms & suites between levels three and eight. Reception and a cocktail bar are located on the upper ground floor with a rooftop pool and two-storey bar / events venue located on levels ten and eleven. The hotel also features a boardroom on level eight with capacity for 12 patrons.

The lower ground floor features a leased restaurant trading as NOMAD Melbourne, which also benefits from an exceptional market reputation. NOMAD’s food is inspired by travels through Spain, Morocco and the Middle East and is cooked with fire and smoke.

A floor stacking plan is shown adjacent.

GUEST ROOM SCHEDULE

Property Description (cont’d)

FOOD & BEVERAGE

Situated on the upper ground floor is a vibrant cocktail bar known as Om Nom which is famous for its signature cocktails, high teas and shared dishes & desserts. With a seating capacity for approximately 65 patrons, Om Nom has been a favourite spot for both hotel guests and wider Melbourne for many years.

MEETING & CONFERENCING

Situated on the rooftop of Adelphi Hotel is a vacant events space formerly known as ‘Mon Bijou’, a very popular and well-known venue within Melbourne. The venue operates over two levels, featuring an exclusive private room and a covered outdoor area. Adelphi Hotel features a large boardroom approximately 45sqm in size with seating for up to 12 guests. The boardroom is located on level eight with a beautiful aspect over Flinders Lane and the laneways of Melbourne.

AMENITIES & FACILITIES

Guest facilities also include an expansive rooftop deck and swimming pool, sauna (currently non-operational) and two private laneway car parks.

Hotel Trading Information

Below is an outline of the hotel’s historical revenue trading performance:

OWNERSHIP OUTGOINGS SUMMARY

Estimated combined Notional Land Tax based on $8.55m: $169,500.00

Estimated combined Greater Western Water Charges (ex usage): $31,664.36

Estimated combined Council Rates: $48,930.72

Third Party Lease Summary

NOMAD Melbourne entered into a six-year initial term commencing in August 2020. Below is a synopsis of the current lease agreement:

Property 1/187 Flinders Lane, Melbourne VIC 3000

Tenant Nomad Hospitality Pty Ltd

Term of Lease Six years commencing 1 August 2020

Further Term(s) Two further terms of six years

Commencement Rental $180,000 per annum plus GST

Current Rental $190,962 (gross) per annum plus GST

Rental Review • 3% increase on each anniversary of the commencement date • Market review at the commencement of each further term

Permitted Use Retail sale and consumption of food and beverage and other products permitted under the relevant zoning

Landlord’s Installations Hot water service, separate utility meter – gas, separate utility meter –electricity, grease trap, fire extinguishers, fire reels, sprinklers, general lighting, emergency lighting, 3 phase electrical distribution

Tenant’s Installations None at the start of the lease

Security Bond An amount equal from time to time to six month’s rent, being $99,000 inclusive of GST at the start of the lease.

Sale Process

Adelphi Hotel, 187 Flinders Lane, is being exclusively offered for sale by JLL Hotels & Hospitality Group and CVA Property Consultants by the vendors.

INVITATION TO BID

Interested parties will be asked to submit an EOI at a date to be advised which will contain an offer to purchase the Property.

The EOI submitted by interested parties (“Bidders”) should include the following key terms:

1. Proposed purchasing entity and ownership;

2. Nominated offer price;

3. Nominated deposit amount;

PETER HARPER

Managing Director

Head of Investment Sales - Australasia

M +61 412 560 246

E Peter.Harper@jll.com

NICK MACFIE

Vice President

Investment Sales

M +61 415 673 197

E Nick.MacFie@jll.com

CHARLES CINI

Chief Executive Officer

CVA Property Consultants

M +61 411 423 389

E charles.cini@cva.melbourne

IAN ANGELICO

Managing Director - Agency

CVA Property Consultants

M +61 418 336 088

E ian.angelico@cva.melbourne

4. Source of capital for the Bidder(s) to complete the transaction;

5. Appropriate evidence that demonstrates the Bidder(s) financial capacity to complete the acquisition including the status of debt finance;

6. Outline of corporate, shareholder, regulatory or other approvals required to be obtained by the Bidder(s);

7. Any other significant conditions required to close the proposed acquisition;

8. A list of additional information that the Bidder(s) wishes to obtain to complete an investigation of the Property; and

9. Proposed settlement date.

SELECTION OF BIDDER(S)

METHOD OF SALE

The Property is being offered for sale via Expressions of Interest closing Thursday 27 April at 2pm (AEST).

INITIAL MARKETING

This Information Memorandum is being made available to qualified investors on a confidential basis.

INSPECTIONS

Purchasers are invited to contact the exclusive selling agents to schedule a private viewing of the premises.

The Vendors may select from among those Bidder(s) who have submitted an EOI one or more Bidder(s) to whom the Vendors may grant the opportunity to conduct formal due diligence.

In selecting the Bidder(s), the Vendors may consider such factors as:

• The Bid price and other terms outlined in the EOI;

• The Bidder(s) financial capability;

• The Bidder(s) ability to complete the transaction with the Vendors in a manner which will satisfy timing; and

• Any other objectives or factors that the Vendors consider relevant in its absolute discretion.

DUE DILIGENCE REVIEW

Selected Bidder(s) will be afforded the opportunity to conduct a due diligence review to gain a greater understanding of the Hotel. A Confidentiality Agreement will also be required to be entered into before access will be provided.

The due diligence review will include access to additional information, including relevant technical, financial and legal information pertaining to the Hotel. It is the Bidder(s) responsibility to arrange for appropriate personnel, legal and/or financial advisors if necessary to complete its own independent due diligence review by the end of the designated due diligence period. The Vendors reserve the right to deny any Bidder(s) the opportunity to participate in the due diligence review at any time for any reason. In conducting the due diligence review, Bidder(s) must follow all instructions and regulations that the Vendors and/or their exclusive agents may from time to time set in their sole and absolute discretion. In particular, Bidder(s) will not be permitted, without the prior written consent of the Vendors, to discuss this Information Memorandum, the sale process or any aspect of the proposed sale with the Hotel’s or the Owner’s general management, employees, consultants, clients or suppliers.

SALE AND PURCHASE AGREEMENTS

The selected Bidder(s) will be provided with a copy of the draft Sale and Purchase Agreement and other ancillary agreements, which will be prepared by the Vendors legal counsel.

Final bids including a mark-up of the Sale and Purchase Agreement will be required to be lodged on a date to be advised.

VENDORS DECISION

The Vendors reserve the right to evaluate each EOI and to freely deal with it in such manner as the Vendors considers appropriate in their absolute discretion, including to propose amendments to any such EOI, seek clarification or additional information from any Bidder(s), or reject any such EOI without giving reasons for such action. No Bidder(s) shall be entitled to enquire into the basis of the Vendors decision in any respect or appeal against any decision to accept or reject any such EOI.

The Vendors have the right to sell their interest in the Property or withdraw their interest in the Property at any time (whether before or after the EOI process) in their absolute discretion without liability to any party which has participated in the EOI or due diligence process, and any party participating in these processes will be taken to have accepted this right.

DISCLAIMER

This document has been prepared by JLL’s Hotels & Hospitality Group solely for the purposes of providing initial information to a select number of potential investors to assist them in deciding if they are sufficiently interested in the Property to proceed with further investigation. It is provided on a confidential basis and is not to be re-supplied to any other person or reproduced in whole or in part without the prior written consent of JLL’s Hotels & Hospitality Group.

The information contained in this document is intended as a guide only; it does not constitute advice and does not constitute any offer or contract for sale or lease or otherwise.

Figures and calculations contained in this document are based on figures provided to JLL’s Hotels & Hospitality Group by outside sources and have not been independently verified by JLL’s Hotels & Hospitality Group. Any projections or analysis represent estimates only and may be based on assumptions, which may not be correct. Except where otherwise provided, all references to rent, income or price are GST exclusive.

Potential investors should not rely on this information as a statement or representation of fact and must make their own enquiries to verify and satisfy themselves of all aspects of such information.

While such information has been prepared in good faith, no representations or warranties are made (express or implied) as to the accuracy, currency, completeness, suitability or otherwise of such information. To the extent allowed by law, none of the Vendors, JLL’s Hotels & Hospitality Group, or their respective officers, employees, contractors or agents shall be liable to any person for any loss, liability, damage or expense (“liability”) arising directly or indirectly from or connected in any way with any use of or reliance on such information. If any liability is established, notwithstanding this exclusion, it will be limited to AU$1,000.