Tycoon’s $25 million resort game in Blue Mountains

Jerry Schwartz, Australia’s largest private hotel owner, has set up shop on the Leura Gardens Resort site near Sydney’s Blue Mountains, paying about $25 million.

Dr. Schwartz said the purchase of the property near his luxury Fairmont Resort was a “no-brainer” for introducing better synergies to the Schwartz Family Company hotel group, which has a spread of assets on the East Coast.

The seller was the privately held Elanor Hotel Accommodation Fund, which bought the resort in June last year.

The sale amount represents a 25 percent premium on the fund’s original purchase price of approximately $20 million. The deal closed off-market after an approach from CBRE’s national hotel director, Wayne Bunz.

The Leura Gardens Resort has been developed on almost two hectares of land and includes a mix of guest rooms, suites and serviced apartments, plus a two-bedroom manager’s residence on site. It also features large conference and events facilities, including two restaurants, bars, a coffee lounge and a gym.

In a statement to The Australian, Dr Jerry Schwartz, who was worth $596 million on The List, said: “I thank Elanor for the opportunity to combine Leura Gardens Resort with the Fairmont and utilize its facilities.”

“The acquisition also allows us to serve a different target group of guests at the 3.5-star level, in addition to the higher category of 4.5-star guests at the Fairmont,” he says.

Elanor’s head of hotels, tourism and leisure Marianne Ossovani said that while the company’s initial intention was to maintain a long-term strategy for the asset, its main priority was to ensure robust returns for investors. “We are pleased to have achieved significant returns in a short time,” she says.

Mr Bunz said that given the popularity of the Blue Mountains with domestic tourists, opportunities to purchase large-scale assets in such iconic locations were scarce, and existing owners are taking advantage of the high barriers to entry for new properties with rising development costs.

“This sale is a great outcome for both Elanor and Schwartz Group investors, who will benefit from the economies of scale in owning and operating this property with the Fairmont Resort Blue Mountains and other assets in the portfolio,” he said.

Elanor acquired the resort, which is located across the street from Leura Golf Club, from vacant property last year from investment partners Arvi Rubenstein and Jonathan Wolf. It had undergone a $5 million renovation in 14 months. Tourism sources say the hotel benefits from its proximity to the Blue Mountains National Park.