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News release


Chinese buyers hot on Australian hotels

Chinese buyers were responsible for purchasing an astonishing 28% of Australian hotel sales in 2014

Chinese buyers were responsible for purchasing an astonishing 28% of Australian hotel sales in 2014, with the total transaction volume reaching circa AU$2.75 billion across Australia and New Zealand.

JLL's Hotels & Hospitality Group research reveals that Chinese buyers were active across Australia raising their investment stakes from 3% in 2013, up to 28% in 2014.

"There is no reason to expect that Chinese investment won't continue this year and we anticipate it will account for approximately 50% of all hotel transactions in 2015," said Mark Durran, Managing Director – Investment Sales at JLL's Hotels & Hospitality Group.

"Our intelligence puts domestic investment at 46% in 2014, up from 24% in 2013, revealing that Australian investors are also keen to purchase high quality hotel assets."

JLL's Hotels & Hospitality Group was responsible for approximately AU$1.1 billion of sales across Australasia (roughly 44% of all hotel transactions across Australia and New Zealand in 2014) with the record sale of Sheraton on the Park in Sydney at AU$463 million – the largest single asset hotel sale in Australian history – leading the sales.

"Last year was the highest volume of transactions on record for Australia and New Zealand and there is no reason to expect 2015 won't be an exceptional year as well."

Mr Collins believes the recent high level of activity from Chinese buyers will only increase investor appetite in the Australian hotels market.

"Chinese buyers only started looking at the Australian hotel market in the past 18 months and with no major new supply being built for a few years now, competition for quality assets is exceptionally strong," Mr Collins said. "Chinese investors, along with other international capital, are looking to buy anywhere across Australia where quality hotel assets are on offer."

Mr Collins believes Australia's transparent market conditions appeals to all foreign investors.

"Australia is a transparent market, which is also very liquid offering solid returns to investors," Mr Collins said.

Activity across the Australian market is expected to continue in 2015, with Queensland hotels particularly becoming an area of focus.

"There is no doubt that Queensland, both in Brisbane, and in areas like the Gold Coast and Cairns, offer some quality hotel assets," Mr Durran said.

"I wouldn't be surprised to see a number of regional transactions go through around Australia in 2015. For a number of years, since the GFC, the market has been in decline, but now we are seeing a combination of foreign investors, high net worth individuals and hotel operators becoming active again."

Besides the quality hotel assets on the market, the sharp decline in the Australian dollar, appeals greatly to foreign investors.

"The Australian dollar has dropped to its lowest level since mid-2009 and interest rates are at record lows, which both favour investment conditions," Mr Durran said.

"Investors are looking for quality four to five-star hotels around Australia and there is plenty of competition to buy the right asset."