CLIENT LOGO TO APPEAR HERE RESEARCH AND ANALYSIS REPORT HOTEL SALES 2017 An analysis of hotel sales in Australia by Colliers International Accelerating success.
2017: a year in review Following the three strongest years on record, hotel sales volumes across Australia eased back in 2017, reaching $2.02 billion on 47 sales tracked by Colliers International. Whilst moderating, volumes remain well above the long-term average of $1.25 billion. Some of the notable trends evidenced through the year include: Victoria topped the nation with 45% of total hotel sales by value, compared with 23% in NSW. Hotel sales in Melbourne included the Hilton Melbourne South Wharf (the year s largest transaction at $230 million), Sheraton Melbourne and the Mercure Melbourne Treasury Gardens. Mercure Geelong represented the largest transaction outside of the Melbourne CBD. After dominating activity over the past few years, NSW was very subdued in 2017, with only eleven transactions in total and none in the core Sydney CBD. A number of large metropolitan hotels transacted, notably the InterContinental Sydney Double Bay and the Mercure Sydney International Airport. There was significant activity in relation to new turnkey developments with hotel development deals totalling $394 million, almost one quarter of the total volume. The limited level of existing inventory being offered is pushing investors into the development and turnkey space. Key development transactions included the W Melbourne, Four Points by Sheraton Central Park Sydney and Quest Penrith. Offshore capital continued to dominate, accounting for 62% of the total sales value but with a notable broadening of the capital base with purchasers from Japan, Singapore, USA, Hong Kong, Vietnam, Germany and the UAE. Chinese investors dropped from 40% of total sales in 2016 to just 9% in 2017, as restrictions on outbound capital slowed activity. Strong growth in Australian tourism is attracting more diverse investors to the sector. Origin of Hotel Purchasers by Value ( >$5 million) $3,750 $3,500 $3,250 $3,000 $2,750 $2,500 $2,250 $2,000 $1,750 $1,500 $1,250 $1,000 $750 $500 $250 $0 Benchmark Passing Yields of Hotel Transactions 10% 9% 8% 7% 6% Millions 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Australia Hong Kong Other Singapore USA Japan China Source: Colliers International Based on the availability of yield evidence, the past four years has seen a continued compression of yields; from over 9% in 2013 to just under 6% in 2017 and approaching the level of the last cyclical low in 2011. 5% 4% 2007 2008 Source: Colliers International 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 is likely to see similar patterns to 2017, with limited opportunities in Sydney and Melbourne, as owners in those markets continue to enjoy strong cashflow. More activity is likely to occur in the metropolitan markets and other State capitals, as owners capitalise on limited inventory in the market. The robust pipeline of new hotels should see activity increase again over the medium term. Yield Ranges - 2017 Hotel Transactions 12.00% 10.00% 8.00% As always, we welcome your thoughts and feedback. Gus Moors Head of Hotels Australia Yield Range (%) 6.00% 4.00% 2.00% 0.00% Sydney Melbourne Brisbane Perth Other Capital Cities Non CBD Locations Source: Colliers International Source: Colliers International
NSW $3,250,000 $3,400,000 $6,000,000 Cooks Endeavour Motor Inn Hotel Blue and Conference Centre Quality Hotel on Olive Type Motel Rooms 21 Price/Room $154,762 Type Motel Rooms 24 Price/Room $141,666 Rooms 61 Price/Room $98,361 Tweed Heads Katoomba Albury $29,400,000 $105,000,000 $32,000,000 Quest Penrith (under construction) Intercontinental Sydney Double Bay Airport Sydney International Motor Inn Type Serviced Apartments Rooms 108 Price/Room $272,222 Sale Date May 2017 Rooms 140 Price/Room $750,000 Sale Date May 2017 Rooms 120 Price/Room $266,666 Property under construction. This price reflects hotel component only Penrith Double Bay Mascot COLLIERS INTERNATIONAL Hotel sales in Australia 2017 3
NSW $15,000,000 Ibis Sydney Thornleigh $145,000,000 Four Points by Sheraton Central Park (under const.) $76,400,000 Mercure Sydney International Airport Sale Date May 2017 Rooms 105 Price/Room $142,857 Sale Date Jul 2017 Rooms 297 Price/Room $488,215 Sale Date Nov 2017 Rooms 271 Price/Room $ 281,919 This is a development site transaction. Thornleigh Sydney Wagga Wagga $17,500,000 Quest Nowra Sale Date Sep 2017 Type Serviced Apartments Rooms 81 Price/Room $216,049 Nowra 4 Hotel sales in Australia 2017 COLLIERS INTERNATIONAL
NSW VIC $220,000,000 $9,000,000 $230,000,000 W Melbourne (Collins Arch Development) Best Western Plus Brooklands of Mornington Hilton Melbourne South Wharf Sale Date Feb 2017 Rooms 294 Price/Room $748,299 This is a turnkey transaction. Sale Date Feb 2017 Rooms 53 Price/Room $169,811 Rooms 384 Price/Room $598,958 Melbourne Mornington Melbourne $15,000,000 $24,200,000 $19,700,000 Camberwell Serviced Apartment Hotel Mercure Geelong Flagstaff City Inn Type Serviced Apartments Rooms 28 Price/Room $535,714 Rooms 138 Price/Room $175,362 Sale Date Apr 2017 Rooms 42 Price/Room $469,048 Hotel to be demolished for redevelopment. Hawthorne East Geelong West Melbourne COLLIERS INTERNATIONAL Hotel sales in Australia 2017 5
VIC $27,100,000 $36,200,000 All Nations Backpackers Hotel Backpackers Morning Star Estate $24,000,000 All Seasons International Bendigo Sale Date Jun 2017 Type Backpacker Rooms 50 Price/Room N/A Sale Date Jun 2017 Type Resort Rooms 20 Price/Room N/A Sale price includes management rights. Sale Date Aug 2017 Rooms 77 Price/Room $311,688 Facility has 100 gaming machines. Melbourne Mount Eliza Bendigo $70,000,000 Mercure Melbourne Treasury Gardens Circa $135,000,000 Sheraton Melbourne $43,000,000 Adina Melbourne Sale Date Sep 2017 Rooms 164 Price/Room $426,829 Hotel to be demolished for redevelopment. Sale Date Oct 2017 Rooms 174 Price/Room $775,862 Sale Date Nov 2017 Rooms 65 Price/Room $661,538 Price reflects hotel component only. Melbourne Melbourne Melbourne 6 Hotel sales in Australia 2017 COLLIERS INTERNATIONAL
$55,000,000 $7,750,000 Royce Hotel Sale Date Dec 2017 Type Hotel Rooms 100 Price/Room $550,000 Melbourne Mercure Warragul Sale Date Dec 2017 Type Rooms 47 Hotel Price/Room $164,894 Warragul NSW QLD NSW VIC $140,000,000 Sheraton Grand Mirage Resort $7,100,000 Heron Island $16,000,000 Peppers Airlie Beach Resort Sale Date Feb 2017 Rooms 294 Type Island Resort Rooms 115 Sale Date May 2017 Type Resort Rooms 59 Price/Room $476,190 Price/Room $61,207 Price/Room N/A Sale price includes management rights. Gold Coast Gladstone Airlie Beach COLLIERS INTERNATIONAL Hotel sales in Australia 2017 7
QLD $6,000,000 Kingsford Smith Motel Hamilton $16,500,000 New Inchcolm Hotel & Suites $6,150,000 Paradise Inn Motel Sale Date Jun 2017 Type Motel Rooms 36 Price/Room $166,667 Sale Date Jun 2017 Rooms 50 Price/Room $330,000 Sale Date Jul 2017 Type Motel Rooms 35 Price/Room $175,714 Redevelopment Site Brisbane Spring Hill Gold Coast $23,750,000 Nobbys Outlook $77,000,000 Mercure & Ibis Brisbane $36,180,000 Emporium Brisbane Sale Date Sep 2017 Type Rooms 37 Motel Price/Room $641,892 Largest beachfront parcel of land available for redevelopment - can be redeveloped for 3 storey property. Sale Date Dec 2017 Rooms 412 Price/Room $186,893 Sale Date Dec 2017 Rooms 102 Price/Room $354,706 Gold Coast Brisbane Brisbane 8 Hotel sales in Australia 2017 COLLIERS INTERNATIONAL
ACT & VARIOUS $17,000,000 Sundown Motor Resort $16,000,000 Quality Hotel Woden $55,000,000 Byron Bay Hotel & Apartments, Ibis Canberra Sale Date Apr 2017 Type Motel Rooms 100 Price/Room N/A Sale price also included the sale of 88 manufactured home sites. Sale Date Aug 2017 Rooms 57 Price/Room $280,702 Sale Date Aug 2017 Hotel & Serviced Type Apartment Rooms 208 Price/Room $132,212 Combined purchase. ACT, Canberra ACT, Woden NSW & ACT Byron Bay & Canberra SA $43,000,000 Mercure & Ibis Styles Grosvenor Hotel $7,050,000 Adelaide Royal Coach Sale Date Nov 2017 Rooms 245 Price/Room $175,510 Sale Date Apr 2017 Type Motel Rooms 49 Price/Room $143,878 SA, Adelaide SA, St Peters COLLIERS INTERNATIONAL Hotel sales in Australia 2017 9
TAS $4,450,000 Villa Howden $15,550,000 Hanlon House at Stanley $16,000,000 Cape Wickham Links Sale Date May 2017 Type Boutique Hotel Rooms 10 Price/Room $445,000 Sale Date May 2017 Type Boutique Hotel Rooms 6 Price/Room N/A Sale Date Jul 2017 Type Motel Rooms 16 Price/Room N/A This is a golf course transaction. TAS, Hobart Region TAS, Stanley TAS, King Island WA $73,500,000 Novotel Langley $50,000,000 Crowne Plaza East Perth $12,500,000 Aire West Perth Sale Date Jan 2017 Rooms 256 Price/Room $287,109 Rooms 189 Price/Room $264,550 Sale Date Aug 2017 Type Serviced Apartments Rooms 64 Price/Room $195,312 Mixed use project under constriction WA, Perth WA, East Perth WA, West Perth 10 Hotel sales in Australia 2017 COLLIERS INTERNATIONAL
WA $11,000,000 Sebel Mandurah $8,427,000 $12,650,000 The Royal Palms Residences and Resort Indian Ocean Hotel Scarborough Sale Date Jul 2017 Rooms 84 Price/Room $130,952 Sale Date Jun 2017 Type Motel Rooms 24 Price/Room $351,125 Sale Date Jun 2017 Rooms 59 Price/Room $214,407 WA, Mandurah WA, Busselton WA, Scarborough COLLIERS INTERNATIONAL Hotel sales in Australia 2017 11
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DARWIN Tony West Director +61 409 422 458 BRISBANE Neil Scanlan National Director +61 437 700 007 Baden Mulcahy National Director +61 439 034 033 Leo Carne Executive +61 439 736 861 SYDNEY Gus Moors Head of Hotels +61 404 005 066 Karen Wales Director +61 405 227 152 Nigel Greenaway National Director +61 431 288 677 Michael Thomson National Director +61 412 053 598 Chris Milou Director +61 413 615 398 Robert Bird Assistant Valuer +61 419 124 533 Denise Kirk Analyst Hotels +61 414 708 112 MELBOURNE Guy Wells Associate Director +61 405 612 416 COLLIERS INTERNATIONAL Hotel sales in Australia 2017 13
Colliers International does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one-way or the other in relation to the accuracy of such information, figures and projections. Colliers International will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. 14 Hotel sales in Australia 2017 COLLIERS INTERNATIONAL