Asian investors back $104m hotel raising

Larry Schlesinger


Hotel-focused fund manager Salter Brothers has secured $104 million in fresh equity to partly fund its acquisition of the NEXT Hotel in Brisbane.

The group, led by Brothers Paul and Robert Salter, struck a deal in May to buy the 304-room hotel from Challenger for $150 million. Around 60 per cent of the fresh injection of capital came from Asian-based investors with the raising oversubscribed.

Further capital raisings are planned as the group turns its focus to developing new hotels, including in Melbourne and Canberra, with an eye on potentially floating a $1 billion hotel trust.

“We’ve got a few assets we first want to build and open, and then, if the market conditions are right, we’ll look at doing an IPO,” managing director Paul Salter told The Australian Financial Review in May.

The group made its presence known in December 2015, when it acquired a portfolio of five IHG hotels from Australia Post Super for $500 million.

Its Australian hotel portfolio comprises Crowne Plazas in Melbourne, Coogee and Canberra, the Intercontinental Rialto on Collins Street, a Holiday Inn in Potts Point and voco Gold Coast.

Hotel developments in the works include a new hotel planned at 474 Flinders Lane, a site the Salter brothers bought for $22.8 million in 2007, and a Holiday Inn Express in Canberra.

The most recent acquisition, the NEXT Hotel, is Salter Brothers’ first in Brisbane.

The hotel, operated by Singapore’s next Story Group, opened in 2014 following a $50 million refurbishment of the former Chifley at Lennons hotel. It includes two levels of retail on Queen Street Mall.

Commenting on the latest capital raising, Paul Salter said: “We would like to thank both our existing investors who continue to show faith in our long-term strategy and also a number of new investors that have joined our register.”

Niall McCarthy, director of funds management at Salter Brothers, said: “The significant interest in the Salter Brothers Hotel Group from both sophisticated high net worth investors and institutional investors is testament to the quality of the portfolio, the team and outgoing opportunity that has been developed over the last four years.”


Salters Brothers backs proptech company Hendry Group

Australian Financial Review

14 July 2019

By Sarah Thompson and Anthony Macdonald

As high-flying hotel tycoons Paul and Robert Salter prepare to float a $1 billion-odd hotel trust, their firm’s private equity arm has snapped up a stake in a “proptech” company. Street Talk can reveal Salter Brothers, which has about $2 billion in assets under management across property, credit and private equity investments, has agreed terms to invest in Sydney-based Hendry Group.

Hendry Group is a national advisory firm focused on risk mitigation and statutory compliance. The company, which was ranked 53rd in the AFR Boss 100 Most Innovative Companies List in 2018, has taken a tech-bent in recent years, with a SAAS platform taking much of what it does online. Hendry Group is led by chief executive Emma Hendry. It’s expected to use Salter Brothers’ capital injection to grow the business. It’s Salter Brothers’ third investment in the fast growing proptech sector, joining its private equity portfolio alongside stakes in DisplaySweet and Airservice. DisplaySweet provides a SAAS platform for property developers, while Airservice is another SAAS platform and targets hotels, resorts, stadiums and restaurants.

Salter Brothers boss Robert Salter told Street Talk he sees Hendry Group as a “dominant and disruptive force” in the proptech sector. “Ms Hendry successfully transitioned Hendry Group to be a first mover in the provision of a SAAS platform in this space, which will allow the company to expand into new markets internationally ” he said Salters Brothers backs proptech company Hendry Group into new markets internationally, he said. “As a company we have been firm in our strategic plans to disrupt the current operating model of our industry and the built-environment more broadly,” Hendry added. “This backing will assist us to drive that change and to future-proof and optimise the built-environment for all.”

Salters bank $1b hotel fund with Next deal

Australian Financial Review

22 May 2019


High-flying hotel tycoons Paul and Robert Salter have moved a step closer to floating a $1 billion hotel trust on the Australian Stock Exchange after buying Brisbane’s 304-room Next Hotel from Challenger for $150 million.

The brothers, who originally set up their SB&G Hotel Group investment platform in 2014 in partnership with Michael Gu’s advisory firm iProsperity, set $1 billion of assets under management as the benchmark for a potential float back in 2015.

This was a time when they had joined forces with Lorenz Grollo’s Equiset to acquire a $500 million portfolio of hotels including the Intercontinental Hotel in Melbourne from Eureka Funds Management.

The latest acquisition of the Next Hotel plus two levels of retail on Brisbane’s busy Queen Street Mall is due to settle at the end of July.

The luxury hotel is operated by Singapore’s Next Story Group. It opened in 2014 following a $50 million refurbishment of the former Chifley at Lennons hotel.

Tom Gibson and Simon Rooney from JLL Hotels brokered the off market deal on behalf of Challenger.

Once settled, it will grow the value of the Australian portfolio to more than $1 billion with Salter Brothers (as the group is now known following a parting of the ways with Michael Gu) holding seven Australian hotel, including three Crowne Plaza hotels in Coogee, Melbourne and Canberra.

The speed at which Salter Brothers have built up their fund, backed by high net worth local and offshore investors, highlights how attractive the Australian hotel market has become amid a tourism boom, historically high occupancy rates and a record development pipeline.

Alongside its latest acquisition, Salter Brothers announced a $100 million capital raising through Cedit Suisse and UBS to de-gear the balance sheet and provide scope for further acquisitions and to fund its development of two hotels in Canberra and Melbourne.

Second capital raising

Speaking to The Australian Financial Review, managing director Paul Salter said the group planned to undertake a second capital raising of between $120 million and $150 million later in the year, aimed at bringing in cornerstone institutional investors as it worked towards a potential float.

“We’ve got a few assets we first want to build and open, and then, if the market conditions are right, we’ll look at doing an IPO” Mr Salter said.

“We don’t want to have any assets in development [when we go public].”

If successful, it would mark the return of hotels REITS to Australia. Globally, there are many including in Singapore, Hong Kong and the US.

The last Australian hotel REIT, managed by Thakral Holdings, was taken private in 2012.

Plans by James Packer’s Crown to float a $2 billion hotel portfolio were abandoned in 2017.

Mr Salter said the unlisted fund was now delivering internal rates of return of more than 12 per cent.

Market bouncing back

Commenting on the decision to buy its first Brisbane hotel, Mr Salter said he took the view that the Brisbane market was coming back after absorbing a lot of new supply.

More broadly, he said the corporate hotel market where Salter is focused was not impacted much by Airbnb and the “shadow” accommodation sector.

“Melbourne has always stepped up to absorb new supply and Sydney is still a cracking market,” he said.



Industry Leaders Forum

SBG were pleased to be invited to be part of the HM Magazine 2019 Industry Leaders Forum,
published in February/March 2019.


Artist’s Impression


Business outlook for 2019

As an international specialist fund manager with a focus across a range of asset classes and geographies, innovation continues to be a key theme and driving factor across SB&G’s operations for 2019. While 2018 was a year of expansion and acquisition for SB&G, 2019 will be a year of consolidation and active asset management within our Hotel Group. CapEx will be up on 2018, but our spending this year will be strategically focused on our existing portfolio with investments planned to improve existing products, introduce new offerings and to progress our plans for bringing brand new hotel developments to market.


Artist’s Impression

Value-add initiatives: Crowne Plaza Melbourne & Coogee

In support of our market opportunities in 2019, we have a number of value-add initiatives in play to strategically position our assets to perform well against competitors. This includes completing the refurbishment of Crowne Plaza Melbourne where we will be increasing our room count by another 35 rooms and increasing our meeting space facilities by 100%, taking the asset to 1200sqm, and opening up new customer and business segment opportunities. We also plan to undertake a comprehensive refurbishment of Crowne Plaza Coogee Beach over the winter where we will add an additional 10 rooms and 150 sqm of meeting space, and relaunch with two new restaurant & bar facilities.


New Developments: Melbourne & Canberra

With regards to new build hotels, we will be progressing plans for our two developments in Canberra and Melbourne. Our property at 475 Flinders Lane, Melbourne was acquired in 2017 and our vision here is for a new 350+ room upscale hotel, scheduled to be completed in 2020. In Canberra, a new Holiday Inn Express will be added to the current Crowne Plaza site, complementing the existing hotel and diversifying the offering.


Hotel Investment, Operations & Development

We consider hotel development across Australia to be at its peak right now which means there is a massive injection of talented new staff required.  We have now fully recruited and established an experienced, industry specialist hotels team at SB&G with recognized capabilities in hotel investment, operations & development.  We take an active investment management approach and will be setting high expectations from our management companies and key partners such as InterContinental Hotel Group (IHG), to invest in attracting, developing and retaining talent to fill our asset requirements, and in support we will invest in ensuring our assets have programs and facilities to promote a strong staff culture, opportunities to learn and opportunities for career advancement.


Artist’s Impression

Market outlooks for 2019 and industry impacts

Whilst we consider we may face some head winds in our various markets at different times in 2019 with either new supply entries, a short-term election-related travel slow down or possible refurbishment timeline changes, our projections for the markets we operate in are positive, with strong underlying fundamentals remaining.

With many commentators forecasting for unemployment to remain low and potentially further decrease, we consider this to be a very positive factor in driving continued growth in our markets providing our hotels in 2019 an opportunity to outperform 2018 trading.

A focus on Hotel Restaurants & Bars

Further to the refurbishments across Crowne Plaza Melbourne and Crowne Plaza Coogee Beach, we will be innovating our restaurant and bar model across our portfolio together with hotel management partner IHG, by creating new restaurant facilities and new talent to deliver on-trend experiences.


Artist’s Impression

New in-room technologies

As Crowne Plaza hotels and other brands in our portfolio largely cater to business travellers and to the corporate and MICE market segments, in another planned value-add to increase guest satisfaction and stay preference, we will roll out new in-room technologies across certain portfolio hotels following successful prototyping conducted last year. We are focused on delivering improved technology and connectivity within our hotels and an overall quality experience through greater flexibility and personalisation.


voco – Gold Coast

A new opportunity for trading growth in our Group in 2019 is our recently acquired voco Gold Coast property.  During Q3 & Q4 of 2018 the hotel went through a refurbishment and rebranding to launch as the first IHG ‘voco” branded hotel in the world.  The hotel commences the 2019 year now primarily positioned as one of the Gold Coast’s leading upscale hotels equipped with a fresh new product and service culture to lure guests seeking an on-trend experience.  This, we expect, together with the low Australian dollar helping to drive increased domestic tourism and the upgrade works at the Gold Coast airport delivering increased airlift capacity, will drive a significant increase in annualised earnings from this property.


Expectations for year ahead

With the outlook for 2019 and two new hotel builds scheduled for 2020, SB&G will this year launch a significant capital raise towards our stated target of $1billion.

Our focus for the coming year will be to maintain a competitive edge across our portfolio through the deployment of refurbishments and value-add initiatives. In particular, the changes to restaurant and bar offerings across the Group will emerge as a key point of difference and innovation.

The culture at SB&G is about thinking differently, encouraging our team members to use their experience to analyse opportunities from multiple perspectives and to create new ways of working and partnering with brands and people we trust. It is a culture we are proud of and we believe underpins our success.

Our achievements and investments over the last twelve months have set us up for an exciting year and we are looking forward to working hard and building on this success throughout 2019.


As seen on-line


SB&G Group were very pleased to receive this wonderful review of our newly refurbished Crowne Plaza Melbourne Hotel last Sunday, 13th January 2019.  

The review appeared across the major Australian newspapers of the The Sunday Age (Melbourne) and the Sydney Morning Herald (Sydney). 

Congratulations to our Crowne Plaza Melbourne Hotel Team.


The Crowne Plaza Melbourne perches on the banks of the bustling Yarra – closer, we are assured, than any other Melbourne hotel. And the views of the river we gawk at as we enter our rooms attest to that. Much as the Yarra and the riverfront have been transformed over the past few years, so has this hotel, with the recent unveiling of a 12-month, $25 million refurbishment of its 402 guestrooms.


The Crowne Plaza perches on the banks of the Yarra.



The hotel is a short walk to Crown Casino and Southbank restaurants, and the free City Circle Tram Stop is out the front. But the real drawcard is the river. Once the butt of jokes because of its brownish waters, locals and visitors alike are now keen to walk across the Yarra (on various bridges), drink on it (Ponyfish Island) and race each other on it. Kayaks, canoes and other small boats are everywhere and the shores are teeming with walkers, joggers and cyclists. There is also a new ‘‘beach’’ – bathing boxes, deckchairs and even sand on the riverbank in the nearby Wharf Hotel.


A pleasant yet subtle fragrance hits you as you walk into the Crowne Plaza’s lobby. The scent (a secret) hints at an opulence and refinement that is now evident in the hotel’s refurbished rooms, but is perhaps lacking in the yet-to-be-transformed public areas. The lobby looks tired but the good news is that phase two of the refurbishment is set for mid-this year, when this area and the hotel’s outdoor heated pool, bar, restaurant and gymwill be redesigned. Meanwhile, business guests can enjoy work hubs and meeting rooms and take advantage of the hotel’s proximity to Melbourne’s Convention and Exhibition Centre.


As mentioned, our luxury suites have views that can’t help but take centre stage. But there is much more to be happy about. The generous rooms are in muted grey but are light-filled and highlighted by a pop of electric blue from a designer chair, and some shimmering wall art by Australian photographer Judith Martinez. My lounge area has a sofa, large desk, fridge, pod coffee machine, kettle and assorted teas. The bedroom offers an equally spectacular river

view plus a king-sized bed blessed with premium bedding, clever lighting, a large wardrobe with towelling robes, a safe and ironing board. But the star of the show is the bathroom, with a deep tub with its own view to the river, a walk-in shower and separate toilet. The vanity is simply beautiful, with a large, gold-coloured mirror above a bowl basin. The hotel’s city view rooms have big workstations and walk-in wardrobes


The in-house restaurant, the Clarendon St Grill, is also in line for the 2019 revamp. The menu has all the good standards: salmon, salt-grass lamb, smoked pork belly and Gippsland steaks. But it is a vast and dark space and we spot just one other diner in a far corner. And this is Melbourne, the sun is shining and we are keen to sample what the city does best: feed people.We take a short cab ride to Hardware Lane for a bowl of pasta but there are many, many options nearby, including Southbank. Meanwhile, back at the Crowne, the in-house restaurant is more attractive the next day as a breakfast option, offering a buffet, with a good selection including pancakes, fresh omelettes and congee.


Take advantage of the free Melbourne city tram to seek out some of what Melbourne does best: food, bars, cafes, fashion and art. Etihad Stadium, Melbourne Aquarium, Docklands and the Queen Victoria and South Melbourne markets are all nearby. To take advantage of the hotel’s river location in summer, pull up a deck chair at the Yarra Beach Bar at the nearby Wharf Hotel for a taste of Melbourne quirk.


This hotel has been caught midtransformation. Judging by the bedrooms that have already been refitted, the upgrade will be something special and fitting for a landmark property that sits in such a vibrant and convenient location.


Rooms from $265 a night. 1-5 Spencer
Street, Melbourne. Phone (03) 9648 2777.


Jane Richards travelled toMelbourne at her own expense and was a guest of Crowne Plaza, Melbourne.






As seen on-line

World’s first voco branded luxury hotel opens on the Gold Coast

IHG together with owners SB&G Group, have opened the world’s first voco branded hotel on the Gold Coast, introducing a new upscale offering within the high performing Gold Coast hotel sector.

The opening of voco Gold Coast represents IHG’s first hotel globally for its new upscale hotel brand: voco, just five months after it was launched.

The Mayor of the Gold Coast, Tom Tate and CEO of Destination Gold Coast, Annaliese Battista were among the dignitaries that officially opened voco Gold Coast at a packed ribbon cutting ceremony at the hotel this morning.


L-R – Brenden van Blerk, GM voco Gold Coast; Paul Donovan, Chairman Destination Gold Coast; Gary Baildon, Councillor Surfers Paradise; Tom Tate, Mayor Gold Coast; Ruwan Peiris, Director of Operations IHG Australasia; Annaleise Battista, CEO Destination Gold Coast; Paul Salter, Managing Director SB&G Group.


With 389 rooms, the property is situated in the heart of Australia’s iconic Surfers Paradise precinct and steps away from Queensland’s famous beaches. The hotel offers all the features that guests can expect from the upscale voco brand including two swimming pools, gym facilities, L’Aqua Day Spa, 800sqm of meeting space and expansive views of both the ocean and hinterland.

Brenden van Blerk, voco Gold Coast General Manager commented that, “As one of Australia’s all-time favourite holiday destinations, we are very excited to be introducing the voco brand across the much-loved Gold Coast. Quintessentially Australian, the Gold Coast offers travellers the ultimate getaway with warm weather, amazing beaches and several great ways to have fun. This perfectly aligns with the new voco hotel – a fun, spirited, upscale offering.”

Multiple dining options are also available in the hotel’s three unique restaurants – Waves, Clifford’s Grill & Lounge and Social House – all designed to offer vibrant social experiences for voco guests to enjoy.

voco, inspired by the meaning ‘to invite’ or to ‘come together’ in Latin, will combine the informality and charm of an individual hotel, with the quality and reassurance of a global and respected brand. The public spaces of voco Gold Coast emphasise this social element, fittingly named Social House Café, which collectively houses a bar and lounge within the venue, offering a space for everyone.




voco Gold Coast also offers several exclusive features that sets it apart from existing hotels, starting with their onsite beehives, producing honey for various uses throughout the hotel. The strong sustainability focus also promises refillable dispensers for products such as soap, along with a high-end Aveda amenity and an initiative with Gold Coast City Council to ensure all kitchen waste is recycled.

Paul Salter, SB&G Group Managing Director said, “We are proud to be the first owner of a voco branded hotel in the world and to have worked closely with IHG to bring this new brand and service culture to the Gold Coast, making the high-quality refurbishment a reality in only 5 months.”



 从左至右IHG澳大拉西亚地区营运总监Ruwan Peiris、黄金海岸市长Tom Tate、以及SB&G集团董事总经理Paul Salter



Kenneth Macpherson, CEO EMEAA, IHG commented that, “IHG launched the voco brand in June in Australia, we are so pleased to see the brand’s momentum continue here with the first opening in the iconic Gold Coast with long standing partner, SB&G Group. voco delivers a guest experience that stands out, with touches of charm and memorable, distinctive and dependable hallmarks.”

With six signings to date, in addition to the four properties that will rebrand as part of the UK portfolio deal, there are expected to be more than fifteen voco signings in total for the brand by the end of 2018.

These include three signings in Australia, in Victoria’s wine region, Yarra Valley and in the heart of Melbourne’s bustling CBD as well as a number of properties in the UK. The opening of voco Gold Coast will be quickly followed by hotel openings in Solihull and Cardiff in the UK.

To tap into the excitement of the Gold Coast and embrace the playfulness of the voco brand, the new hotel offers a calendar of social events held within their street facing public spaces from a daily high tea experience to weekly trivia nights, among many others.

This distinctive brand will offer owners the ability to drive higher returns through delivering a compelling guest experience and leveraging IHG’s powerful systems. This includes best-in-class revenue management and technology capabilities as well as IHG® Rewards Club, one of the world’s largest hotel loyalty programmes.

Inference Technologies receives buyer interest, sale to strategic likely in three years – CEO


Inference Technologies, a US/Australia-based provider of virtual agents, is likely to be sold to a strategic buyer in around three years’ time, founder and CEO Callan Schebella said.

The virtual agent market is very acquisitive, and Inference already had a number of buyer approaches during its recent capital raising process, Schebella said. A sale at this point would not give the best returns for shareholders, but it will be considered once the business has grown using the raised capital, he said.

Acquisitive companies in the space include Amazon [NASDAQ:AMZN], Cisco [NASDAQ:CSCO], Microsoft [NASDAQ:MSFT] and Google [NASDAQ:GOOGL] – companies that have an angle on telecom and customer experience, Schebella said. Inference saw interest from other communication/telecom platform companies – players similar to, but not including, Aspect and Avaya [NYSE:AVYA], he said.

Likely buyers are platform providers related to service to telcos, such as Nuance [NASDAQ:NUAN], Google, Genesys, BroadSoft/Cisco, and Ericsson [NASDAQ:ERIC], added Paul Salter, Managing Director of Inference’s largest shareholder, SB&G Group.

An IPO is a less likely exit scenario – given the M&A activity in the sector, a sale will give a better valuation, Salter continued. Typical trade sale sector multiples are 8-10x annual recurring revenue, he said. It is rare for companies in the space to list, Twilio’s [NYSE:TWLO] 2016 IPO being the exception, Schebella agreed.

In the event of a future sale, Inference would hire a Financial advisor in the US, where most of the buyer universe as well as the vast majority of the company’s partners and resellers are based, Schebella said. The company will move to be incorporated in Delaware, US, he added.

Capital raises, past and future

Inference recently raised AUD 16m (USD 12m) from Melbourne-based funds manager SB&G Group’s Private Equity Fund, Atlas Capital Group’s Emerging Companies Fund and US venture capital fund PeakSpan Capital Growth Partners, as announced on 19 July. Atlas Capital is part of the SB&G Group.

The capital will be used mainly to increase sales and marketing in the US, UK, Europe and Asia, and is expected to Finance the company over the coming two to three years, the CEO said. Inference aims to increase annual recurring revenue more than tenfold by June 2020. It is growing on average 9% month-on-month with large gross margins. The company expects to become cash flow positive in 24 months, Salter said.

It is possible that the company could do another capital raise ahead of a sale, Schebella said. SB&G Group and PeakSpan have set aside more funds to allow follow-on investments, Salter said. If Inference only needs a small sum, existing investors will fund it, while if it needs to raise a larger sum in the double-digit millions, it could open to new investors, he said.

Inference provides a software-as-a-service intelligent virtual agent (IVA) and intelligent interactive voice response (IVR) platform. The platform works via phone, text, app or webchat. The product is sold mainly through telecom carriers, which white label it and sell it to end customers. The company works with 35 resellers, including many of the largest carriers in Australia and North America, and has more than 300 end customers, he said.

Competitors include Genesys and Nuance, but Inference is different in that the solution is 100% browser-based, very quick to set up and users do not need technical expertise to set it up, the CEO said.

The platform as it is today launched in 2012, but the company originally started in 2006 and is a spinoff from Telstra Research Laboratories, Schebella said. It is now headquartered in San Francisco with an office in Melbourne.

Inference previously received investment of around AUD 6m from SB&G Group in 2015, in roughly equal parts as equity and a convertible note, the CEO said. This investment allowed Inference to launch into the US, he said.

SB&G is the largest shareholder with 27% across funds. PeakSpan is the second largest shareholder, and Schebella the third, he said. Other shareholders include high-net-worth and other private individuals, Salter added.

by Christel Thunell in Sydney

ACT to get $50m Holiday Inn

Australian Financial Review

25 July 2018

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