Australian alternative asset manager MA Financial has seeded its new open-ended hotel fund with a A$96m asset in Melbourne acquired from Singaporean real estate group Hiap Hoe.

The 273-room Vibe Docklands hotel is the first asset for the MA Accommodation Hotel Fund, which hopes to build out to a A$1bn portfolio.

Sydney-based MA said the fund would target high-quality accommodation hotel assets, similar to the 4.5-star Vibe Docklands hotel.

MA Financial’s Anthony O’Hea, managing director of alternative real estate investments, said the financial performance of Australia’s accommodation hotel sector had rebounded in 2023.

“Hotels in Australia have seen a dramatic post-COVID recovery, with hotel revenues in line with, or exceeding, pre-COVID levels despite international short-term visitor arrivals having only recovered to approximately 75% of pre-COVID volumes.”

O’Hea added that the improved market conditions combined with resilience, current asset pricing and the opportunity for further growth made for a compelling investment proposition.

Joint CEO of MA Financial, Julian Biggins, said the firm had ambitions to grow its exposure to the asset class to more than A$1bn.

“We believe that the dislocation caused by the global pandemic, increased construction costs and the current macroeconomic conditions create a compelling opportunity to acquire accommodation hotel assets on very attractive terms. This is expected to generate strong risk-adjusted returns for fund investors.” 

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