Quest leads way to suburbs, regions

Australia's suburbs and regions are the next growth sector for serviced apartments as the weight of offices and workers shifts to city fringes, the Quest group says.

Businesses decentralising their workplaces and growth in regional towns were driving the expansion of longer stay accommodation, Quest Serviced Apartments chairman and founder Paul Constantinou said.

"We're seeing a lot of corporates coming to us, especially in the regional towns because that's where there's been a lot of expansion," Mr Constantinou said.

"In the past it was very city centric." Now the major growth areas are in the western suburbs of Sydney and Melbourne, he said.

This week Quest began construction of a 97-apartment complex at Tullamarine Airport, which it expects to finish within a year. Builders Mercon Group will erect the five-level building on airport land.

Over the past two years Quest has opened serviced apartments in 15 locations including Sydney Olympic Park and Dubbo in NSW, Breakfast Creek in Queensland, and Bendigo Central, Werribee, Bundoora, Gordon Place, Caroline Springs and Frankston in Victoria.

On the drawing board are plans for Mentone and Traralgon in Victoria and Nowra in NSW.

The group expects to finish construction of another eight serviced apartment sites in eastern states and the Northern Territory in 2014.

Mr Constantinou founded the privately held, Victorian-based company 25 years ago.

It has since reached market dominance in the longer-stay serviced apartment sector, developing and controlling 153 serviced apartments via a franchisee model in Australia and New Zealand.

Local competitors Mantra Hotels and Adina Apartment Hotels are about one third Quest's size. Other entrants are coming into the sector with Meriton building a serviced apartment arm in NSW.

The group is also likely to face competition from global behemoths such as the Hilton and Intercontinental chains that are setting up complexes under sub-brands the Homewood and Staybridge Suites in Asia.

Mr Constantinou said Quest had expanded by focusing on understanding which locations had a lack of supply or poor quality of accommodation.

A year of Quests

■ Albury on Townsend (NSW)

■ King William South (SA)

■ Berrimah (NT)

■ Woolloongabba (Qld)

■ Upper Mount Gravatt (Qld)

■ Townsville on Eyre (Qld)

■ Melbourne Airport (Vic)

■ Chermside (Qld)