Transaction volume in the Australian hotel investment market reached $1.9 billion for the first half of 2015, and looks set to overtake the $2.5 billion transacted throughout 2014, according to JLL.
Asian investors have dominated hotel investment activity, accounting for around 65 per cent of total transaction volume.
According to Craig Collins, JLL’s CEO for hotels and hospitality in Australasia, transactional activity has been buoyed by two high-profile Sydney deals. The Westin Sydney (pictured) sold for around AU$445 million – recording the highest price per room for a large-scale hotel in Australia. The Hilton Sydney also recently sold for AU$442 million.
“This level of demand is also being felt across the wider investment market with flow-on effects for both major cities and regional hotel assets,” Collins explains.
Cairns has been an active investment market with the Pullman Cairns International and Pacific Hotel Cairns both changing hands. In Brisbane the Next Hotel and Adina Apartment Hotel have both sold.
While the Perth and Melbourne markets haven’t been as active as others, Collins expects this to change with some quality hotel stock likely to come to market in the second half of the year.
This week saw one of the biggest hotels deals on the west coast with Singapore-listed Bonvests Holding purchasing the Four Points Sheraton Perth hotel for $91.5 million.
Collins says Australia will remain a major focus of Asian investors with “favourable exchange rates and a strong tourism demand outlook presenting a more attractive investment opportunity when compared to other investment destinations globally,” Collins concludes.