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MANTRA Group, which is just weeks away from listing its shares on the Australian Securities Exchange, has made a concerted push into the Australian CBD market with news of acquisitions in Brisbane, Melbourne and Canberra.
The Surfers Paradise-based company, which is Australia’s second-largest accommodation provider, has acquired two properties managed by Mint Hotels & Apartments and has rebranded them Mantra St Kilda Road Melbourne and Mantra on the Quay Brisbane.
Meanwhile, Mantra also plans to open its first Peppers hotel in Canberra after taking over management of the Diamant Hotel Canberra from boutique hotel operator 8Hotels.
The property will be rebranded as Peppers Gallery Hotel Canberra in July.
News of the new acquisitions comes on the heels of Mantra Group this week reviving plans for a share float after abandoning an attempt earlier this year due to soft market conditions.
Mantra Group is seeking to raise $239.1 million through the issue of 132.8 million shares at $1.80 each. This represents 53 per cent of the company’s issued capital and values the company around $450 million.
The move will amount to a partial sell-down by majority shareholders CVC Asia Pacific and UBS who will retain a 43.3 per cent interest in the company after listing.
Management, including CEO Bob East, will hold a 3.5 per cent stake.
Mantra shares are scheduled to begin trading on the ASX on a deferred-settlement basis on June 20.
Mantra is forecasting revenue of $450.1 million this financial year and a jump to $490.9 million in 2015 on the back of an expansion of its property network both domestically and offshore.
Mantra Group has 113 properties in its portfolio and manages more than 11,600 rooms through its three brands – Peppers, Mantra and BreakFree.
East says the push into CBD markets is aimed at capitalising on rising demand in business travel.
“Sustained increases in demand continue to outpace growth in supply in the Melbourne market, creating an environment for rate driven REVPar (revenue per average room) growth,” East says in a statement.
“Demand is always strong in our current Brisbane hotels – Mantra South Bank and Mantra on Queen – so to bring further inventory of such a high quality into the group for our growing corporate client base is a very positive outcome.
“Brisbane continues to be a buoyant market - albeit not at the same heights of two or three years ago - but we predict a period of moderate but sustained growth post G20 Summit.”
The new acquisitions lift Mantra’s Melbourne portfolio to seven properties and to three in Brisbane.
Meanwhile, the Canberra move marks the first Peppers hotel for the nation’s capital.
Peppers has traditionally focused on resort accommodation but first moved into a metropolitan-style development in 2010 with the opening of Peppers Broadbeach.
Peppers has also been expanding into Asia with the opening last year of Peppers Sentosa Seminyak in Indonesia, and it is set to manage a new hotel earmarked for Melbourne’s Docklands precinct in 2016.
“This is a historic announcement for Peppers and the first of many CBD properties we have planned for Australia and New Zealand,” says East in relation to the company’s move into Canberra.
“We have felt for some time that the Peppers brand would work in CBD locations and needed to find the right property to align with the Peppers name.”
East was not available to comment further on Mantra’s public share float which closes on June 17.
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