Hotels up for grabs as tourists start to flood in
THE hotel sector is poised for a period of strong growth boosted by a record number of in-bound tourists and rising demand for assets from investors.
Growth in regional towns has also triggered a new phase of property developments from hotels to serviced apartments.
According to the Bureau of Statistics, the number of tourists arriving in Australia rose 1.6 per cent in December to record highs. Arrivals are up 8.3 per cent on a year ago.
In December 56,000 tourists from China came to Australia, up 17.2 per cent on a year ago. China remained the second-largest source of tourist arrivals with a record 643,800 Chinese visiting Australia in 2012.
Two of the latest offerings are the Ibis Hotel King Street Wharf in the Sydney CBD and Mercure Hotel Parramatta. They are being sold by Tourism Asset Holdings (TAHL) and have a combined value of about $50 million. The hotels will remain under the management of Accor.
The assets are being offered only a month after TAHL raised $175 million from the sale of Novotel, Mercure and Ibis hotels in Brisbane and Perth to the Singapore-based CDL Hospitality Trust.
Mark Durran and Peter Harper from Jones Lang LaSalle Hotels are advising on the two Sydney assets and said the timing was right for TAHL to take advantage of the limited supply of premium hotels for sale.
Mr Durran, the managing director investment sales Australasia at JLL, said the hotel investment market experienced one of the strongest years on record in 2012 with 25 major transactions for a total volume of $1.44 billion. "Given investor appetite remains strong, and that Sydney is the most highly sought hotel investment market in Australia, we are anticipating that the sale of the hotels will attract significant interest from both domestic and international investors," he said.
On the development side of the market, Quest Serviced Apartments on Tuesday opened its latest asset at Sydney Olympic Park. Quest's chairman, Paul Constantinou, said there were plans to build another 10 properties in NSW by 2014 to offer accommodation in regional areas such as Albury, Shellharbour, Nowra, Orange and Liverpool.