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Former Partners Group exec to lead Salter Brothers’ Asia expansion
As seen in perenews.com
The Australian firm is planning to launch a value-add fund and bespoke strategies with its capital partners in the region.
Rahul Ghai has been hired as managing director, Asia, to lead Australian alternative investment group Salter Brothers’ real estate expansion in the region.
Ghai joined the firm’s newly established Singapore office in November from Swiss manager Partners Group, where he was most recently managing director and regional head for private real estate Europe. Before he relocated to London in 2021 to lead the group’s European real estate business, he was managing director and regional head for private real estate Asia at the firm since 2017, based in Singapore. Prior to that, he spent six years at Deutsche Bank in Singapore as managing director and head of investments for Asia-Pacific.
In his new role, Ghai will lead Salter Brothers’ growth outside of Australia, where he will start by identifying investment opportunities with the firm’s capital partners and institutional clients. It is understood the firm is looking at both bespoke mandates for its institutional investors and an Asia-focused value-add fund to be launched next year.
“Australia is our home market and we have done well on behalf of our clients,” Ghai said. “We are increasingly seeing the maturity and institutionalizing of the broader hospitality sector across Asia, so it feels like a natural extension for us to go outside of Australia. We are also responding to what our clients are seeking, as we grow outside Australia.”
In terms of sector, the firm is planning to grow its boutique luxury hotel strategy across Japan and Southeast Asia. It will also look to acquire or organically build platforms focusing on hospitality and the broader living sector, including serviced apartments, co-living and build to rent, according to Ghai. He added that Salter Brothers’ skill set and experience in managing hospitality assets is “complimentary and transferrable” to the extended living sector.
Having opened its first Asian office outside of Australia in Singapore in August, the firm is understood to be in the process of opening an office in Tokyo next. Currently, it has a team of seven investment professionals across Singapore and Japan. Under the leadership of Ghai, some of the more senior hires in the new team include former KSL Capital Partners vice-president Ethan Quek and former IHG Japan director of finance Gene Osborne. In addition, the firm has an existing hospitality operations team based in Vietnam.
“We are excited about the caliber of the team that we have assembled to launch our Asian expansion, with teams now based in Singapore and Japan,” said Paul Salter, managing director of Salter Brothers. “We are committed to the region with in-country teams that can leverage our our existing scale in Asia-Pacific. In Rahul, we have an experienced leader who we believe is the right person to grow our franchise throughout Asia.”
With capital coming from both private wealth clients and institutional investors, Melbourne-headquartered Salter Brothers invests in specialist property, private equity and credit. The group currently has assets under management of more than A$3 billion ($1.95 billion; €1.8 billion). After Salter Brothers’ hotel platform was formed in December 2015, it has built a portfolio of more than 5,000 rooms across 37 hotels.
Salter Brothers hit the market with new tech fund
Melbourne-based fund manager Salter Brothers is eager to get in on the tech wreck.
Street Talk understands Gregg Taylor’s new wholesale equities fund will launch this week, targeting $50 million in commitments to funnel into private and listed multi-stage tech companies.
The unlisted fund will focus on five verticals, telecommunications, enterprise software, fintech, medtech and property tech, seeking to take advantage of what they see as a 20-year valuation lull in the sector.
“We believe that the current vintage of our Fund presents a compelling opportunity for investors to enter the market at attractive valuations in the technology sector, where valuations are extremely depressed,” potential investors were told.
The investment committee – made up of Taylor, Salter Brothers chief Robert Salter and Waves Tech Ventures co-founder Hayley Evans – will be advised by a group of industry specialists including eftpos Australia chief executive Stephen Benton and Nu Mobile’s boss Paul O’Neile. Investment director Tineyi Matanda and former Morgans stockbroker Chris Titley feature on the fund’s investment team.
The Salter Brothers Tech Fund has a 5-year lock-up period and is targeting a 15 per cent gross internal rate of return. It will charge a 2 per cent management fee and a 20 per cent performance on outperformance of a 5 per cent hurdle over the financial year, subject to a high watermark.
The fund will be nestled alongside the Salter Brother’s private equity and listed equities funds, under the firm’s funds management umbrella, which also includes a property and credit arm. Salter also operates an advisory and capital markets business and a Significant Investor Visa program and has around $3 billion in assets under management.
Investor commitments will be accepted in the first year after the launch and unlisted investments made in the first three years. Most of its investments will be centred on Australian and New Zealand small and mid-sized venture capital and late-stage/pre-IPO tech with around a third in listed equities and cash.
The investment house’s equity investments over the years include foreign exchange trading platform OzForex, digital payments business IP Solutions International, fintech Verrency and liquor producer and marketer Top Shelf International Holdings.
Salter plans dramatic revamp for historic InterContinental site
Salter plans dramatic revamp for historic InterContinental site
Ben Wilmot – Commercial Property Editor
Lisa Allen – Associate Editor & Editor, Mansion Australia | September 27, 2023
Funds house Salter Brothers is planning a dramatic overhaul of the InterContinental Melbourne The Rialto, which would see it scrap a 1980s extension to the heritage complex and replace it with a new tower of offices and luxury hotel rooms.
The move defies concerns about the city’s lagging office market and the surge in the supply of hotel rooms, with plans for a new mixed-use tower to rise beside The Rialto Towers on Collins St at a time when many traditional projects are struggling to get off the ground.
Salter Brothers is best known as a hotel funds manager but also counts equity investments and other asset classes in its empire, and it is pitching the tower as fitting in with surrounding commercial buildings, including the neighbouring Rialto Towers and Olderfleet building.
The two buildings that make up the existing hotel – the Winfield Building and the Rialto Building – are significant in Melbourne’s history as they hark back to Victoria’s building boom.
The Rialto building was considered a landmark office building and the Winfield Building dates to 1891 and was formerly the Wool Exchange Building.
The Grollo Group redeveloped the entire site, including refurbishing the two historic buildings and constructing the Rialto Towers, in the 1980s. This included an extension to the Winfield building that will be demolished under the Salter plans and replaced by the new tower, along with a refurbishment of the heritage buildings.
Salter said the heritage Winfield and Rialto buildings would be safeguarded and it has lodged an application with Heritage Victoria for a renewal of the well-known heritage assets.
Under the plans, they will continue to be used as a hotel, and the non-heritage 1980s extension would go, with other concealed heritage elements to be uncovered. The historic horseshoe shaped lane way will be reopened for dining, bars and shopping.
Architectural firm Cox has worked up the designs for a mixed-use building in what Salter called an elegant tower, which it says will bolster the precinct’s reputation. The tower would be largely concealed by the adjacent high-rise Rialto Towers.
The building tapers in from the western side boundary, protecting the airspace above the top of the heritage Rialto building, and is set back behind the Winfield building on Collins St.
The plan includes 270 new luxury hotel rooms, 22,000sq m of premium offices, 1,500sq m of retail at Collins St and Flinders Lane, and a new club housed in the Winfield building.
Salter Brothers managing director Paul Salter said that guests and visitors wanted unique experiences from hotels.
“Investing in the preservation of the Winfield and Rialto buildings and opening up the hidden heritage covered walkway to the public, are critical to the unique experience we want to offer here,” he said.
“Melbourne at its best is a contemporary celebration of our history and heritage. Protecting the heritage, keeping the hotel use and adding office and retail will contribute to a vibrant mixed-use precinct that will also support the ongoing revitalisation of central Collins Street,” he said.
IHG Hotels & Resorts Australia and Pacific managing director Matt Tripolone said that distinctive heritage buildings and laneways were cherished by Melburnians.
“The heritage aspects of our existing Intercontinental Melbourne are an important part of the appeal of staying here. So we are excited about the opportunity to welcome our guests to a fully restored heritage experience within a lively precinct,” he said.
The plan is subject to approvals by Heritage Victoria and the Victorian Department of Transport and Planning, with a planning application to be lodged shortly.
The developer hopes to kick off building works in 2025 with the project to take about three years.
HICAP ANZ Transaction of the Year award 2022-2023
Salter Brothers is thrilled to announce that we have been awarded Hotel Investment Conference Asia Pacific (HICAP ANZ) Transaction of the Year award 2022-2023 for the Spicers Retreats portfolio acquisition. This is the second year in a row we’ve won this award and we were also finalised for the Escarpment Group transaction.
HICAP ANZ honours the companies responsible for the most influential hotel industry deals. This transaction was not only one of the largest regional hotel portfolio transactions in Australia, it was also one of the most multifaceted; due to the vendors’ ownership structure, negotiation of third party management agreements, assets located across five regional councils within NSW and QLD and consent from the Queensland Government regarding the management of the Scenic Rim Walk. The transaction also required the rehiring of some 360 staff across the portfolio.
On behalf of the firm, we would like to thank Commonwealth Bank, our advisors MinterEllison, EY, Napier & Blakeley and Turner Family Office advisors McVay Real Estate, Luminis Partners and McCullough Robertson for assisting in the transaction.
Thank you to Raphael Antonini and Wesley Milsom for accepting the award on behalf of Salter Brothers.
Read about one of Salter Brothers’ key financiers on CommBank’s Foresight thought leadership platform.
The importance of strong relationships for one of Australia’s top hotel owners
Salter Brothers has an enviable reputation for completing record-breaking hotel deals. Its Managing Director says that reliability and active management are just some of the reasons for its success.
Alternative investment manager, Salter Brothers, has continued to be a busy acquirer of hotel assets in recent years as occupancy rates and tourism rebounded from the pandemic. That focus has seen the Group make an outsized contribution to market-wide hotel investment volumes that reached $2 billion in 2022, the second highest year on record.
In 2022, Salter Brothers settled on the largest hotel real estate transaction in Australian history – entering a joint venture with Singaporean sovereign wealth fund GIC, and Swiss-based private markets firm Partners Group, to acquire a portfolio of 11 Travelodge hotels for $620 million.
While the size of the platform and quality of the assets has helped attract investors and vendors, Salter Brothers’ Managing Director, Paul Salter, says a crucial point of difference is the Group’s asset management capability.
“We have a large, very experienced asset management team who operate on the ground and drive our capability to add value to assets. Our depth of experience allows us to actively manage properties and ultimately boost performance,” Salter says.
Building a diversified hotel platform
While Salter Brothers invests across asset classes domestically and offshore, it focuses on key segments of the Australian hotel market. It has attracted significant institutional and high net worth investor interest in its Australian Hotel Group Fund (Hotel Fund) and Hospitality Retreat Fund (Retreat Fund).
Constructing the Hotel Fund has made Salter Brothers the largest owner of InterContinental Hotel Group hotels in Australasia. Described as the core portfolio, it holds seven high-quality hotel assets in prime locations across Australia. That includes the Crowne Plazas in Melbourne, Canberra and Sydney, the InterContinental Rialto in Melbourne and the Hyatt Regency in Brisbane.
Late last year, the Group completed a debt refinancing for the Hotel Fund portfolio. The Commonwealth Bank joined a syndicate of financiers to complete the $410 million transaction.
This, alongside equity raised for the portfolio, supports Salter Brothers’ ongoing development activity and refurbishment works across the portfolio. For example, the vision to bring a new mid-scale hotel alongside the Crowne Plaza site in Canberra and a new club lounge for the iconic InterContinental Rialto Melbourne.
Confidence to complete
Most recently, Salter Brothers has launched its Retreat Fund, which Salter says is a strategy designed to acquire unrepeatable assets in amazing locations and benefit from growth in the luxury accommodation market.
The deal that anchored the Retreat Fund portfolio was the acquisition of the Spicers retreats, with Salter Brothers acquiring the freehold interest in six hotels across New South Wales and Queensland. The acquisition of Milton Park Country House & Spa in Bowral, and the Escarpment Group’s five boutique hotels in regional New South Wales have since been brought into the portfolio.
Casey Knight, Commonwealth Bank’s Relationship Executive working with Salter Brothers, says the Bank was proud to act as the sole financing partner to establish the Retreat Fund. “We know it’s vital to move quickly once a deal is active, and we’re pleased to support both Salter Brothers’ executional capability and the broader hospitality and accommodation sector,” Knight says.
Salter says the Retreat Fund’s approach is to originate unique deals and negotiate transactions, often with long-term owners, collaboratively and respectfully. Post-acquisition, the Group can bring in-house expertise to upgrade the asset, operations and experience to a world-class standard.
“We have a unique ability to negotiate with vendors and provide confidence that we will see a transaction through to completion without issue,” Salter says.
“The nature of the retreat assets is that they tend to be long-held by private vendors, some with a deep personal connection to the properties. That means they’re looking for suitors who can execute with certainty and carry the asset’s reputation and legacy forward.”
“Our reputation as a trusted and reliable acquirer is derived in part through having strong capital partners. CommBank came into the debt syndicate for the Hotels Fund in late 2022, and within only a week of that transaction, we had started discussing our vision for the Retreat Fund with them.”
“CommBank demonstrated its support for our strategy quickly, and we could move rapidly as a result. We rely on speed and collaboration among partners to get deals in place, and we were pleased with the way the Retreat financing was executed.”
Finding new horizons
For the Retreat Fund properties, Salter explains that beyond the asset purchase, the team is focused on delivering an experience that appeals to an exclusive clientele. That includes enhancing food and beverage offerings and a focus on wellness.
“We have a Director of Culinary and Creative Experience, and we recently appointed a Director of Wellness to create a holistic and personalised approach for each guest,” Salter says.
The Group’s expertise in this area is central to the launch of its own luxury hospitality brand, Ardour, due to come to the market in 2024. To be run by Salter Brothers’ Hospitality, the Ardour brand of boutique luxury lifestyle hotels is set to complement the Spicers Retreat offering.
From here, Salter Brothers is continuing to search for additional assets to bring into its numerous funds. That includes acquiring Sofitel Adelaide in July 2023, the first for its new Core Hospitality Real Estate Fund and separately advancing acquisition and development sites in Australia and the US. The team is also looking further afield at new markets.
Salter says that growing the platform and the hotel side of the business is a focus, with strong potential to expand into Asia. “We’ve built a diversified platform in Australia that’s grown significantly. We’re now looking to bring our strategic formula to Asian markets and further bolster our regional position.”
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Exclusive: Salter Brothers launches luxury retreats brand
by Ruth Hogan |
Fund manager Salter Brothers is taking its hotels business to the next level with the launch of its very own hospitality brand, Ardour, after 24 months of research and development.
Coming to market in 2024, Ardour is a brand of boutique luxury lifestyle hotels that will offer a retreat experience on a grander scale with facilities to cater for large groups including event spaces, day spas and multiple restaurants.
“Our vision for Ardour, is to curate a beautiful portfolio of iconic hospitality destinations made up of luxurious hotels and estates, that will deliver a retreat experience for groups to create lasting memories,” said Salter Brothers Managing Director, Paul Salter.
“These are crafted from signature guest experiences that are individual to each locale – which makes them unique, compelling and memorable.”
Ardour hotels and estates, which will be managed by Salter Brothers’ hotel management platform, will have between 30-100 guestrooms and suites, with the brand intended to complement the ultra-boutique Spicers Retreats offering – typically 30 or less all suite guestrooms – acquired by the business last December.
Celebration of life and wellbeing is at the centre of the new brand identity with Ardour properties to offer a world-class luxury retreat experience, have a strong focus on celebratory events and experiences, with an elevated food and beverage offering.
Salter Brothers intends for the brand to be positioned in some of the most iconic destinations in Australia, as well as internationally.
Speaking exclusively to HM, Paul Salter said regional areas in Australia will be the starting point for brand growth.
“We are looking to grow the Ardour brand across Australia, starting in the Eastern seaboard,” Salter told HM.
“Predominantly regional [areas] at this stage but we will look at selected urban opportunities as well within the capital cities.
“We will look to grow the brand through real estate acquisitions, re-branding (conversions) and new-build developments.”
Beyond the six Spicers properties and brand assets acquired in December 2022, Salter Brothers has further expanded its retreats portfolio in recent months with the purchase of five NSW properties from Escarpment Group as well as Milton Park Country House Hotel and Spa in the NSW Southern Highlands.
The business currently manages 16 hotels within Australia, including the Spicers brand and a number of independent hotel brands.
More information about the brand including announcements about the first Ardour hotels and leadership is expected in the coming months with the first Ardour hotels slated to open in Q2 2024.