STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 INVESTMENT SUMMARY
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STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18
INVESTMENT SUMMARY
The Grand Hotel, Cairns City, Queensland
ISSUER AND TRUSTEE
Stronghold Investment Management Pty Ltd (ABN 76 164 389 682)
Holder of AFSL No: 480957
INVESTMENT MANAGER
Stronghold Alternative Investments Pty Ltd (ABN 24 138 834 769)
Corporate Authorised Representative No. 1282763 of AFSL 480957
This document is prepared for general information purposes only, and its distribution is limited to wholesale, sophisticated,
and professional investors in accordance with s761G(7)(c) & (d) and s761GA of the Corporations Act 2001 (Cth). If you have
any questions about this, you should consult your accountant, financial planner, solicitor or other suitably qualified professional
advisor. This Investment Summary has been prepared by Stronghold Investment Management Pty Ltd – AFSL No. 480957.
© 2021 Stronghold Investment Management Pty Ltd – [ABN 76 164 389 682]. All Rights Reserved. Commercial in Confidence.
Investment Summary – Stronghold Hospitality Property Trust No. 18.
This document is a summary only and is subject to the disclaimer contained in the Information Memorandum.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 1
OVERVIEW
PROPERTY ADDRESS 34 McLeod Street and 37, 41 & 49 Shields Street, Cairns City, Far North
Queensland
INDICATIVE CASH RETURN 7.25% projected average annual return for the first 3 years
FUND STRATEGY Sustainable income with the potential for further development and capital
gain
EQUITY REQUIRED $7.795 million
WALE 10 years from settlement*
TENANTS Hotel and Bottle Shop: Coniston Hotel Pty Ltd ABN 47 145 646 519
Retail Shops and Commercial Site: Oxford Hotels NSW Pty Ltd
ABN 55 143 131 408 as head tenant
NET DISTRIBUTION Every two months
INVESTMENT FEATURES • Prime Cairns CBD location directly opposite the main entrance to Cairns
Central Regional Shopping Centre (Cairns’ largest shopping centre).
• Established and recently refurbished Hotel comprising Bar, Gaming,
Accommodation and Drive Through Bottle Shop + 6 commercial
tenancies on adjoining land offering further development potential.
• 4,058m2* of ‘Principal Centre’ zoned land over 4 titles with three street
frontages.
• Triple net leases (inclusive of capex).
• 6-month Bank Guarantees
• 6 month surrender clause over the Commercial Site, Retail Shops and
Bottle Shop in favour of the Lessor to allow redevelopment over the
medium term.
• The Tenant and/or associated entities has agreed to invest a minimum
of $500,000 in the trust.
• Depreciation allowances
* Approximate.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 2
LOCATION
34 MCLEOD STREET AND 37, 41 & 49 SHIELDS STREET, CAIRNS CITY, FAR NORTH QUEENSLAND
Cairns is located approximately 1,682 kilometres by road north of Brisbane and approximately 350 kilometres
north of Townsville. It is widely recognised as the ‘capital’ and administrative centre of Far North Queensland. In
2019 the estimated resident population for the Cairns Regional Council area was 166,862 (ABS, 2021). The annual
population growth rate for the previous ten years has ranged between 0.85% and 2.04% (ABS, 2021).
As of the 30th June 2019, the Cairns economy supported 84,572 local jobs with a Gross Regional Product of
$9.60 billion (circa 2.73% of the Queensland Gross State Product).
The unemployment rate for the 2020 June quarter was 5.4% (ABS, 2021).
Cairns has a diverse economy with key employment sectors of health care and social assistance, construction,
retail trade, accommodation and food services, education and training and public administration and safety.
Detailed economic data for Cairns is available from the Manager.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 3
CLICK MAPS TO OPEN LOCATION IN GOOGLE MAPS
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The property occupies a central position within the
Cairns CBD. It is located directly opposite the main
entrance to the Cairns Central Shopping Centre, the
largest shopping centre in Far North Queensland with
11.22 million customers annually (LendLease, 2021).
The centre is fully enclosed and has over 180 stores
together with Myer, Target, Kmart, Coles and Vmax
screens at Event Cinemas. Owned and managed by
Lendlease, a $60 million redevelopment of the centre
was completed in December 2020.
Major infrastructure within close proximity to the
property include the Cairns Bus and Railway Station
(230 metres), Rusty’s Markets (50 metres), Cairns
Central YHA (next door), The Shields Street Mall (175
metres), Cairns Convention Centre (500 metres –
10,000sqm expansion currently under construction),
The Reef Hotel Casino (1 kilometre), Cairns Marlin
Marina (1 kilometre) and Cairns Esplanade Lagoon
(800 metres).
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 4
PROPERTY OVERVIEW
SITE DETAILS
Grand Hotel: 34 McLeod Street 959 sqm
Bottle Shop: 49 Shields Street 1,076 sqm
Retail Shops: 47 Shields Street 956 sqm
Commercial Site: 37-41 Shields Street 1,067 sqm
4,058 sqm
LOCAL AUTHORITY
Cairns Regional Council (www.cairns.qld.gov.au)
ZONING
Precinct 1 - City Centre Core and Principal Centre Zone (Cairns Regional
Planning Scheme 2016).
‘The city centre core is to contain the tallest development with the
greatest mix of uses and the highest degree of active frontages to ground
floors. Activity needs to be encouraged in the city centre through a
diversification of uses that build on the traditional strengths to establish a
24-hour economy.’ (Cairns Regional Council, 2016).
Code Assessable uses include Bar, Food and Drink Outlet, Function
Facility, Hotel, Multiple Dwelling, Office, Shop and Short-Term
Accommodation.
Maximum building height is 46 metres AHD, allowing up to 14 levels
inclusive of the ground floor.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 5
BUILDING DESCRIPTION
GRAND HOTEL
The two-level Grand Hotel was constructed on the site in 1926 with an adjacent single level freestanding bottle
shop constructed in circa 1980. It presents as a classic North Queensland Pub, being listed as a Place of Local
Significance by the Cairns Regional Council.
Trading areas comprise a central bar (featuring a distinctive timber crocodile bar top) with associated PubTAB,
internal and alfresco dining areas, DOSA (Designated Outdoor Smoking Area), gaming room with 35 modern
Electronic Gaming Machines (EGM), two lane drive through bottle shop and 20 pub style accommodation rooms.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 6
Back of house facilities to the ground level include a commercial kitchen with associated cold room and freezer.
The upper level provides accommodation rooms, common area lounge, kitchen, communal bathrooms and
veranda areas.
Adjacent to the Hotel is a freestanding, recently refurbished drive through bottle shop.
Site improvements include bitumen hardstand driveway and parking areas providing 22-line marked car spaces.
Significant refurbishment works have been undertaken in recent years inclusive of a new gaming room, renovated
main bar, accommodation rooms and amenities, new roof and new external paint.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 7
The Cairns Regional Council has recently completed an upgrade of the Shields Street streetscape inclusive of new
footpaths, street furniture and landscaping.
RETAIL SHOPS
Adjacent to the bottleshop on the north-eastern side is a single level block of 5 retail shops leased to a variety of
tenants. Total lettable area is approximately 400sqm on a 956sqm site.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 8
COMMERCIAL SITE
Adjoining the shops on the corner of Shields Street and Sheridan Street and currently tenanted by a materials
handling business, is a former service station. Total lettable area is approximately 170sqm on a 1,067sqm site.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 9
THE TENANT
GRAND HOTEL AND BOTTLE SHOP of Scentre Group. He is Chairman of the Shopping
Centre Council of Australia and a Director of the
The lease of the Grand Hotel and Bottle Shop will be Victor Chang Cardiac Research Institute and Essendon
in the name of Consiton Hotel Pty Ltd ABN 4714 564 Football Club. Peter is a member of the President’s
6519. Consiton has a single director James Mooney. Council of the Art Gallery of NSW and is a Director of
James, commonly known as “Jaz” originates from the Property Council of Australia and a member of the
Belfast Northern Ireland and emigrated to Australia Property Champions of Change.
in 2006. Jaz established Pelathon Management
group in 2007, with a primary focus on purchasing Peter has invested in a number of hotels including The
distressed assets and executing a turnaround strategy. Grand Hotel in Cairns.
Pelathon has completed some 30 plus projects since
its inception and all have achieved a positive outcome. RETAIL SHOPS AND COMMERCIAL SITE
Jaz has 40 years in the business of Pubs and Hotels
Oxford Hotels NSW Pty Ltd ABN 55 143 131 408
having established the Botanic Inns Pub Group in his
will take a head lease of the Retail Shops and
homeland of Ireland before selling in 2003.
Commercial Site with the ability to sublet premises
Consiton is a wholly owned subsidiary of Bruneer Pty to retail and commercial tenants. Oxford has a single
Ltd ABN 7514 313 1935. The directors of Bruneer are director, James Mooney (as above). Oxford also has a
James Mooney (as per above) and Peter Allen. Peter single shareholder, Bruneer Pty Ltd
is an executive Director and Chief Executive Officer ABN 7514 313 1935 (as above).
LEASE SUMMARIES
OVERVIEW
LESSEE Hotel and Bottle Shop: Coniston Hotel Pty Ltd ABN 47 145 646 519
Retail Shops and Commercial Site: Oxford Hotels NSW Pty Ltd
ABN 55 143 131 408 as head tenant
LEASE AREA The whole of the land and improvements being Lots 1 and 2 on RP720044
and Lots 1 and 2 on RP720478 (34 McLeod Street, 37-41 Shields Street, 47
Shields Street and 49 Shields Street, Cairns City, Queensland).
LEASE TERM Ten (10) years from date at least 30 days prior to settlement with 2 x 10
year options
COMMENCING RENTAL $840,000 per annum net + GST comprising:
• $600,000 per annum net + GST for the Hotel and Bottle Shop and;
• $240,000 per annum net + GST for the Retail Shops and Commercial Site
OUTGOINGS By Lessee, inclusive of rates, taxes (including Land Tax, insurances,
property management, repairs and maintenance and capex (triple net).
ANNUAL REVIEWS Fixed 2.5%, to market (with ratchet) at the commencement of each option
SECURITY Bank Guarantee to the value of 6 months gross rental and outgoings.
SURRENDER CLAUSE The Leases over the Commercial Site and the Retail Shops and Bottle
Shop are subject to a surrender clause over the land and buildings in
favour of the landlord subject to 6 months’ written notice (subject to an
existing lease) for the purposes of redevelopment.
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 10DEVELOPMENT POTENTIAL
Preliminary proposal plans have been prepared by The plans provide for a 14-level building + basement
Myriad Design on behalf of the vendor depicting inclusive of, ground floor lobby, retail and food &
the likely ‘maximum’ development potential taking beverage outlets, podium level pool, bar, fitness
into consideration site constraints and applicable centre, lounge and conference rooms, 77 apartments
planning controls. over 11 levels and parking for 179 cars. Refer artist’s
impression following.
Detailed plans are available from the Manager.
© myriad / myriaddesign.com.au
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 11INVESTMENT DETAILS
STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 INVESTMENT SUMMARY
MINIMUM INVESTMENT $50,000
DISTRIBUTIONS Every two months in arrears
TRUST TERM 7 years
UNITS ON OFFER 7,795,000 Units at $1 each
GEARING Maximum 50%
INTEREST COVER Indicative 5.0 times
ISSUER AND TRUSTEE Stronghold Investment Management Pty Ltd (ABN 76 164 389 682),
holder of AFSL No. 480957
INVESTMENT MANAGER Stronghold Alternative Investments Pty Ltd (ABN 24 138 834 769)
WHO CAN INVEST?
Australian investors must fall within the definition of a
‘wholesale client’ as defined within the Corporations
Act. For foreign investors and further information,
please contact the Manager or the Trustee.
ABOUT STRONGHOLD
Stronghold (www.strongholdinvest.com.au) provides
property related investment and advisory services.
We manage or jointly manage circa $225 million
worth of quality properties in Brisbane, Melbourne
and Regional Queensland.
FURTHER INFORMATION
Please Contact
STEVE DE NYS
Director Stronghold Alternative Investments Pty Ltd
T: 0413 515 808
E: sdenys@strongholdinvest.com.au
INFORMATION MEMORANDUM – STRONGHOLD HOSPITALITY PROPERTY TRUST NO. 18 12You can also read
