FJMT has been awarded the design for the new Ritz-Carlton hotel at The Star Casino, Sydney. Photo: Supplied The Ibis Melbourne is one of 15 hotels acquired by Accor.
The hotel sector is preparing for a busy few years with the construction of new sites and the increased demand for rooms from the opening of the new International Convention Centre in Sydney.
Melbourne is also set for heightened activity with new operators entering the market and a busy schedule of sporting events, starting with the n Open tennis championship in late January.
Last week AccorHotels has agreed with a subsidiary of the Abu Dhabi Investment Authority (ADIA) to restructure a portfolio of 31 hotels in .
The agreement involves a 4097-room portfolio bought by the wholly owned ADIA subsidiary in 2013 and operated by AccorHotels.
Gus Moors, head of hotels at Colliers International, said with over $2.4 billion in hotel sales across , 2016 has been an extremely active year.
Over 2015 Colliers sold a number of large hotels including the Travelodge Docklands at 66 Aurora Lane, Melbourne sold to a Singaporean based group, Sing Holdings Limited.
In Sydney, the agents sold 333 Kent Street when iProsperity Group partnered with China based institutional fund manager, Bridge Capital, and paid $8.88 million.
The development approved site is earmarked by iProsperity for a high end hotel and residential building. Deal in line with strategy
Under the latest deal, AccorHotels will convert 15 triple-net leases into 50-year management agreements and extend the management term of one hotel to 50 years, being a total of 16 hotels.
AccorHotels, which operates under the HotelInvest group, will also buy the real estate of the remaining 15 ibis and ibis Budget-branded properties for $200 million.
“This deal is in line with our stated strategy to optimise cash-flow generation, reduce earnings volatility and restructure lease contracts into owned and managed hotels,” HotelInvest chief operating officer John Ozinga said.
“The acquisition of the economy hotels in key locations is a signal of our continued focus on supporting the group’s growth strategy by holding a selective portfolio of profitable hotel property assets.”
The hotels are in locations including Sydney’s Darling Harbour, Sydney Olympic Park and Canberra. The portfolio is also spread across city and regional locations in NSW, Victoria, the Northern Territory, Western and Queensland and encompasses the Pullman, Novotel, Mercure, ibis, ibis Styles and ibis Budget brands.
The acquisition will be accretive to AccorHotels’ EBIT in 2017 and will further strengthen its market leadership position in by securing tenure on key assets. Completion of the acquisitions is subject to certain conditions and regulatory approvals.
AccorHotels is also the operator of the new Sofitel in Darling Harbour, which is due to open in mid to late 2017. Sydney: still the top hotel market
Wayne Bunz, national director, CBRE Hotels, said while 2016 was a slow deal year for major transactions, there was significant activity involving regional and leisure assets.
“In Sydney, the average daily rate will continue to be strong with limited new supply and the new Sydney Exhibition Centre coming on line. This will make Sydney the number one performing hotel market for the next three to five years,” Mr Bunz said.
Other new hotels to be constructed include the Ritz-Cartlon at The Star in Sydney and also James Packer’s Crown resort at Barangaroo. Nearby, the Hyatt Regency has taken over the operations of the former Four Points by Sheraton.
Savills national head of capital strategy, Chris Freeman, said recently, the lower n dollar was seeing more ns holiday domestically while inbound tourist numbers continued to improve. However, economic drivers seen in other sectors continued to fragment national performance.
“NSW, and in particular Sydney, were the standouts over the 2017 financial year with average revenue per available room REVPAR in NSW overtaking Victoria during the year as the state’s economy continues to lead the nation,” Mr Freeman said.
Nationally, REVPAR increased 3.6 per cent during the 2016 financial year, with the average room receiving $115.30 per night, up from $111.30 the previous year, according to ABS data analysed by Savills. Melbourne’s student accommodation boom
In Melbourne, the student accommodation sector has also witnessed significant growth in recent years, with an increase in international students, which has driven the appeal of as a destination for Purpose-Built Student Accommodation (PBSA).
Guy Wells, associate director of Hotels at Colliers International said, this popularity has transformed an immature market into a sector that has seen significant investment in recent times from sovereign wealth funds and institutional investors.
“The volume of finance being injected into the PBSA market is reflected in the higher level of activity and development currently being witnessed,” he said.
“Development sites surrounding major universities have been highly sought after as major players jostle for market dominance, particularly in Melbourne and Sydney,” Mr Wells said.