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News release


Australia’s hotel investment market remains buoyant with strong start to the year

The Australian hotel investment market has had a strong start to 2014 with transaction volumes totalling AUD609 million during the first six months, up 42% on the same time last year. 17 accommodation assets have transacted to-date.

JLL's Hotels & Hospitality Group estimates that transaction volumes look set to reach around AUD1.5 billion for the full year which will be above the long term average.

Craig Collins, Chief Executive Officer - Australasia, Hotels & Hospitality Group, said, "Asian investors continue to lead investment activity accounting for around 70% of the total transaction volume. This follows a handful of large acquisitions, notably the sale of the Sofitel Sydney Wentworth to Singapore group Frasers Hospitality for AUD201 million and the Park Hyatt Melbourne which was purchased by Fu Wah Ltd of China for circa AUD130 million."

Mark Durran, Managing Director – Investment Sales Australasia, Hotels & Hospitality Group, added, "Ovolo Group have been one of the most active acquirers snaring a serviced apartment property in Melbourne and two hotels in Sydney's city fringe for a total investment of around $130 million. Ovolo Hotels originate from Hong Kong where the company operates a range of hotel and serviced apartment properties, but has been attracted to the strong trading fundamentals which are currently evident in the Australian hotel market."

The mid-scale sector of the Australian hotel market has also been quite active with a number of sales occurring in the capital city and major regional markets such as the Airport Sydney International Inn, Quality Suites Wollongong, Quality Hotel Brisbane Airport and Bay Village Boutique Hotel in Cairns. Whilst these types of assets have historically been the domain of domestic investors, they are increasingly becoming the focus of offshore groups.

Sydney has retained its' mantle as Australia's hotel investment hot spot accounting for almost 50% of the total transaction volume so far in 2014, a trend expected to continue in the balance of the year.

Craig Collins commented, "With a number of key asset sales over the past five years, the majority of Sydney's five-star hotels are now held by long term owners and  opportunities to acquire higher graded product in Sydney will be extremely limited over the coming years."