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16/11/2009 -
Mantra to Quit 18 management rights properties and raise the banner: management rights for sale |
As part of our ongoing industry development, we will from time to time provide as an industry resource information we have found that adds value to the industry. This is one of these articles:
Queensland-based hospitality giant Mantra Group will sell 18 properties in its management rights portfolio as part of the company's 'consolidation'. Mantra boss, Bob East said the funds would be used to make new purchases not reduce its $245 million debt.
Mantra Group, formerly the hospitality arm of Stella Group, says that the sell-off of these brands is part of the company’s ongoing “strategy of acquisition and divestment”, and represents 2.5% of the company’s room stock.
“We said from the outset that our plan would be to evaluate which properties fitted our strategy, to divest out of those which didn’t and seek new investment opportunities,” said Mr East.
“The properties we are divesting do not align with our brand strategies and, generally speaking, are smaller buildings more suited to individual operators,’’ he continues. “It’s a process of keeping our brand standards consistent.”
Mantra Group said that the 18 dropped properties represent less than 2% of profit. It also notes that at the request of their respective owners, Mantra will be allowing operators to retain the names of some buildings.
The company owns the management rights to a network of 140 hotels in Australia and New Zealand and the move will allow independent operators to regain control of these operations.
"We are not looking at selling them in one line and we don't need to sell them, so we will look at reasonable offers," said Mr East. "If we can't sell them we will continue to operate them, that's not a huge concern.
"They are pretty small and we want to concentrate on the medium to large-sized hotels and free up some capital. We want to create a small war chest to acquire new products."
He said the company was eyeing off rights to a few larger hotels on the Gold Coast but was unable to comment further.
He said each of the hotel rights for sale earned between $200,000 and $600,000 a year. Mr East said the total figure from the sales would be below $50 million but would not speculate on how much Mantra expected to achieve.
Properties being divested:
Sunshine Coast and 1770: BreakFree Marcoola; BreakFree South Pacific; Mantra Pavillions 1770.
Gold Coast and Northern NSW: BreakFree Enderley Gardens; BreakFree Equinox; BreakFree Maldives; BreakFree Moby’s BreakFree Paradiso; BreakFree Rays Resort; BreakFree Seamark; BreakFree St Tropez; BreakFree Surfers Plaza; BreakFree Surfers Plaza Aruba; BreakFree Surfers Plaza Aloha.
Tropical North Queensland: BreakFree Royal Harbour; Mantra Links.
New Zealand: BreakFree Highview Apartments; BreakFree on the Waterfront.
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