- Transmetro Corporation has sold the Metro Hotel Ipswich International for $14.6 million to developers IC
- The site was reported to be transformed into an aged care facility last year and will go underway as planned
- The deal is expected to be finalised before the end of this month
Transmetro Corporation has sold the Metro Hotel Ipswich International for transformation into an aged care facility. The 97-room Queensland hotel was sold to developers IC for $14.6 million.
Transmetro’s subsidiary Metro Hospitality Group operated the hotel since purchase in 2008. Initial contracts for the deal were exchanged earlier this month after a development application from IC was approved last year.
Public response to the proposal of a new aged care facility in 2018 was overwhelmingly positive.
“On the surface at least it sounds like an efficient way to bring beds on stream much earlier than building something from scratch,” said Transmetro CEO Mark Tucker-Evans.
“Ipswich is interesting because it’s got a lot of young families, but there’s also a lot of people who have been there a long time,” Mark said.
Queensland citizens aged 65 and over make up an estimated 718,000 of the population, projected to be one-in-five of the population in 2036.
Freehold of the property site was bought in 2011. Transmetro showed good business sense by exercising an early call option for a $2 million discount on consideration and a $350,000 discount on the commission.
Initial total consideration, business and freehold was placed at $20 million with a stamp duty and commission of $500,000.
Transmetro asserts even though the sale below initial buying price, the impact of valuations and depreciation results in a $4.6 million profit.
The company also believes this move is first in a process to eliminate company debt.
Transmetro’s decision to sell was made when two additional hotels in the city area opened for business. The company also states the hotel was operating well for profit, although slow and future profit was uncertain.
Both companies expect deal settlement to finalise on March 27 later this month.
Transmetro Corporation’s place in the market today is unchanged. Shares continue to sit at a price of $1.20 each.