Acquisitions on the horizon for cashed-up Baillie Lodges

LATTE chats exclusively with James Baillie

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Australian luxury lodge collection, Baillie Lodges, is eyeing an expansion of its intimate portfolio through acquisitions of properties in Australia, and overseas. The company owns and operates three iconic lodges in Australia – Southern Ocean Lodge, Longitude 131 and Capella Lodge – and is behind the development of a new property in Tasmania called Remarkable Lodge.

Yesterday [20 December, 2018], Baillie Lodges’ Founders, James and Hayley Baillie, revealed an affiliate of US-based KSL Capital Partners had made a “substantial investment” in their business.

“We were certainly not in any way for sale, but we have, over the last couple of years, had quite a few interested parties both on a private equity basis and/or national hotel groups,” James Baillie told LATTE.

“We tried a few on for size, and there was another party that we were talking seriously to earlier in the year,” he said, although those talks didn’t amount to a deal.

Baillie Lodges’ investment from KSL Capital Partners will see the US company take a majority stake in the Australian business. James and Hayley will continue on as Executive Chairman and Director, respectively. The deal will also see the duo retain 100% of Capella Lodge and the new Tasmanian development.

“We are really working with KSL. They have bought into our Baillie Lodges platform: Southern Ocean Lodge, Longitude 131 and all our expansion. Capella Lodge remains managed by Baillie Lodges,” James said, adding that “it’s still very much business as usual.”

“What is interesting is that if you wind the clock back five years, there was little or no interest in the luxury or experiential segments,” Baillie told LATTE.

“In fact, most people didn’t even know it existed. And now it’s almost the hottest space in tourism, from a performance perspective.”

Baillie Lodges were founding members of Luxury Lodges of Australia, established 10 years ago.

“That’s a great example of, potentially, a group of competitors in some areas, banning together on a not-for-profit basis to actually collectively grow the segment. And I feel that’s what we’ve done in Australia; we’ve really put Australia on the map in the whole luxury lodge space.”

James Baillie confirmed to LATTE that the expansion through KSL’s investment will see new locations added.

“There’s definitely a couple of other properties that are already under consideration, and in fact, there will be some news very early in the new year for some additional additions to the portfolio, which is really exciting. Plus we are also continuing to focus on the design [and] development of our Tasmanian property. We are also looking at continual advancements and improvements of the existing lodges in terms of what other opportunities might lie there,” he said.

KSL is also interested in looking outside Australia, where Baillie Lodges can apply its high-end experiential expertise into other markets, in its own style of wild luxury. A city location in Sydney is also back on the radar for the group after it ditched an earlier project.

“One of the places that we’d love to do something that fits our mould is a luxury lodge in a city. Some years ago we started to look at a development in the Rocks in Sydney, which unfortunately, due to red tape and costs, we had to walk away from. Certainly, something we would love to look at is a high-end luxury lodge-style hotel in Sydney, but that’ll be down the track, when the time is right,” Baillie revealed to LATTE.

He ruled out other Australian cities, saying Sydney made sense because “it is the hub of international tourism visitation” but flagged New Zealand as being under consideration.

“I wouldn’t rule out that there could be an existing luxury lodge or lodges within New Zealand that may end up being a good shift for our portfolio and our platform. We wouldn’t be doing a new build in New Zealand; that market is already very well catered for. But there might be some logic in bringing together one or two properties that fit our ethos and portfolio.”

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