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News release

Sydney

Hotel investors circle Sydney, Brisbane and Perth

Jones Lang LaSalle Hotels release results from Hotel Investor Sentiment Survey


According to Jones Lang LaSalle Hotels’ most recent Hotel Investor Sentiment Survey (HISS), investors are circling for hotel investment opportunities around Australia with Sydney, Brisbane and Perth attracting the most interest on the back of anticipated strong trading growth over the short to medium term.
 “The post GFC trading recovery is well underway and market conditions are expected to strengthen over the short and medium terms. Localised supply and demand market dynamics will once again dictate the pace and extent of growth,” said Mr Craig Collins, CEO - Australasia, Jones Lang LaSalle Hotels.
Sydney continues to rank highest out of the Australian markets for positive short term trading expectations with a net balance score of +53.2%. Sydney’s nominal RevPAR has surpassed the 2008-peak and continues along its strong growth trajectory. Trading sentiment is even stronger over the medium term at +62.8%. “The positive trading outlook for Sydney is reflective of an accommodation market which is facing considerable capacity constraints and little drive to build with hotel construction continuing to be held back by market forces,” said Mr Collins.
Trading expectations for Melbourne are quite positive over the short (+35.5%) and medium terms (+50%) driven by strong corporate travel and a major events calendar. Mr Collins noted, “Melbourne is one of Australia’s most solid trading markets. Investors have great confidence in this market, particularly after it recently absorbed new supply increases with apparent ease.”
Brisbane hotels continue to trade solidly in the wake of the January floods, driven primarily by corporate travellers. The medium term trading expectations are quite strong at +37.5%.
As a market with robust corporate demand driven by the booming resources sector and infrastructure investment, Perth’s status as one of Australia’s leading hotel markets only continues to grow with trading expectations remaining strong at +32.9% over the short term and +39.4% over the medium term.  Mr Collins stated, “With hotels trading at near full capacity, and negligible new room supply Perth hotels are expected to continue to trade well with particularly strong average daily rate growth.”
Not surprisingly, the survey results highlighted that a large percentage of respondents rate Sydney (41.5%), Brisbane (40.5%) and Perth (36.1%) as Australia’s hot buy markets. “Buy sentiment for these markets is motivated by a benign supply outlook, strong trading and limited availability of investment grade product across these highly sought after capital city markets. With limited foreseeable investment opportunities, many investors are showing a strong desire to obtain representation in these markets.” said Mr Collins.
In regards to Melbourne, the majority of respondents viewed it as a hold market, however buy sentiment was also high. Mr Collins noted, “The flurry of investment activity witnessed in the Melbourne market over the past six months with well over $400 million in deals is evidence that there is definitely investor appetite for quality assets that fit an investor’s strategy.”