MARKETVIEW Australia Hotels Q3 Continued yield compression in regional markets $18 $1 7.7% 7.2 million +9% *Arrows indicate change from previous year. Key Points ASIAN INVESTORS DOMINATE TRANSACTIONS Annual RevPAR growth for the year ending September was 2.6% reaching $1 ADR increased 1.6% to reach $18 for the year ending September National occupancy jumped to 7.7% recording growth of 1.1% Top performers were Cairns and Hobart who are registering 11% and 8.2% increases in RevPAR for the year ending September International Visitor arrivals reached a record high of 7.2m, an increase of 1% on 21, and domestic overnight trips were up 7% to 88.8m Spending by international visitors in the year to June reached a record high of $2.bn, up 1% on 21, whilst overnight spend on domestic trips increased 6% to $8.9bn Sales volumes so far this year are just shy of $1.9bn Chart 1: Regional Leisure Market* Transaction Yield Spread 2% 2% 1% 1% % % Source: CBRE Research. Note: *Regional Leisure refers to Cairns, The Gold Coast, Hobart 213 21 21 Q3 CBRE Research CBRE, Inc. 1
MARKETVIEW AUSTRALIA HOTELS NATIONAL HOTEL PERFORMANCE CONTINUES TO INCREASE Chart 2: National Overview Darwin. Cairns. Brisbane. Gold Coast. Perth. Adelaide. Melbourne. Sydney. Canberra. Hobart. Source: STR, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 2
Number of keys Total Hotel Sales ($m) MARKETVIEW AUSTRALIA HOTELS SECOND HALF OF PICKING UP THANKS TO INCREASED ACTIVITY FROM ASIAN INVESTORS Chart 6:Total Hotel Sales 3, 2, 2, 1, 1, 21 211 212 213 21 21 YTD Sales Volume ($m) Number of Hotels Sold (RHS) Source: CBRE Research 6 3 2 1 Table 1: Key Transactions YTD HOTEL LOCATION SALE DATE PRICE (m) KEYS Novotel Oasis Cairns Jul-16 $8 31 Park Regis City Centre Sydney Aug-16 $6 122 Rydges Esplanade Cairns Cairns Sep-16 $ 22 Novotel Melbourne on Collins Melbourne Sep-16 $237 38 Source: CBRE Research Chart : National Supply Pipeline opening before January 22, 3, 2, 1, (1,) (2,) Adelaide Brisbane City Cairns Canberra / Darwin Gold Coast Hobart Melbourne City Perth City Sydney City ACT Likely to Proceed Permanent Withdrawal Source: CBRE Research Q3 CBRE Research CBRE, Inc. 3
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Adelaide INCREASE IN HOTEL PERFORMANCE $11 $117 77.2% Chart 8: Visitor Nights in Hotels, Motels & Serviced Apartments, 3, 2, 1, UPTICK IN TOURIST NUMBERS FOR Source: TRA, CBRE Research, Q3 Table 2: Supply Pipeline Property Development Type Peppers Adelaide Rebrand Hotel Holiday Inn Express Aloft Adelaide Lester Hotel Source: CBRE Research, Q3 Quality Number of 22 2. 2. 2 MINIMAL SUPPLY INCREASES Current Status Likely to Proceed Likely to Proceed Likely to Proceed Opening Date September 21 April 217 January 218 January 218 Chart 7: Hotel Performance KPIs y-o-y Change % 3% 2% 1% % -1% -2% Sep-12 Sep-13 Sep-1 Sep-1 Sep-16 Source: STR, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc.
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Brisbane FURTHER DECREASES IN PERFORMANCE $16 $118 72.% Chart 1: Visitor Nights in Hotels, Motels & Serviced Apartments 6,, 2, Source: TRA, CBRE Research, Q3 DECLINE IN TOURIST VOLUMES FOR Table 3: Supply Pipeline Property The Johnson Art Series Hotel Sage QA Hotel W Brisbane Westin Brisbane Source: CBRE Research, Q3 Development Type Quality Number of Current Status Opening Date Redevelopment. September 87 Redevelopment June 93 217 April 3 218 November 286 218 DEVELOPMENT CYCLE NEARING PEAK Chart 9: Hotel Performance KPIs y-o-y Change % 3% 2% 1% % -1% -2% -3% -% Sep-12 Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc.
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Cairns SUSTAINED PERFORMANCE GROWTH $137 $11 83.1% Chart 12: Visitor Nights in Hotels, Motels & Serviced Apartments, 3, 2, 1, Source: TRA, CBRE Research, Q3 NO NEW SUPPLY ON THE HORIZON OVERSEAS VISITORS UP FOR Chart 11: Hotel Performance KPIs y-o-y Change 3% 2% 2% 1% 1% % % -% -1% -1% Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 6
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Canberra MIXED RESULTS FOR HOTELS $163 $119 72.8% Chart 1: Visitor Nights in Hotels, Motels & Serviced Apartments 3, 2, 1, SUBSTANTIAL TOURIST INCREASES Source: TRA, CBRE Research, Q3 Table : Supply Pipeline Property Development Type Quality Number of Current Status Little National 12 Hotel Adobe 86 Narrabundah Vibe Hotel. 191 Canberra Mantra Canberra Redevelopment 176 Source: CBRE Research, Q3 Opening Date September 21 September 21 November 21 February 217 LIMITED NEW SUPPLY IN SHORT TERM Chart 13: Hotel Performance KPIs y-o-y Change 3% 2% 1% % -1% -2% -3% Sep-12 Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 7
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Darwin DOWNTURN CONTINUES FOR HOTELS $19 $1 6.9% Chart 16: Visitor Nights in Hotels, Motels & Serviced Apartments 2, 1, 1, Source: TRA, CBRE Research, Q3 UPTICK IN VISITOR NIGHTS FOR Table : Supply Pipeline Property Development Type Quality Number of Novotel Darwin Rebrand 136 Mecure Darwin Rebrand Airport 181 Mercure Darwin Extension Airport 1 8 Mitchell Street TBA 8 Source: CBRE Research, Q3 Current Status Likely to Proceed Opening Date March March March January 217 OVERSUPPLY IN THE MARKET Chart 1: Hotel Performance KPIs y-o-y Change 3% 2% 1% % -1% -2% -3% Sep-12 Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 8
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Gold Coast STRONG PERFORMANCE GROWTH $18 $133 73.7% Chart 18: Visitor Nights in Hotels, Motels & Serviced Apartments 1, 8, 6,, 2, Source: TRA, CBRE Research, Q3 OVERSEAS VISITORS UP FOR Table 6: Supply Pipeline Property Development Type Jupiter s Casino Extension Hotel Jewel Luxury Resort Source: CBRE Research, Q3 Quality Number of 8 13 Current Status Opening Date November 217 December 218 LIMITED SUPPLY IN PIPELINE Chart 17: Hotel Performance KPIs y-o-y Change 3% 2% 1% % -1% -2% Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 9
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Hobart OPERATING IN PEAK CONDITIONS $168 $139 82.7% Chart 2: Visitor Nights in Hotels, Motels & Serviced Apartments 2, 2, 1, 1, SLIGHT DECREASES IN TOURISM Source: TRA, CBRE Research, Q3 Table 7: Supply Pipeline Property Development Type Quality Number of Current Status Macquarie Wharf. 11 Shed Hotel Crowne Plaza. Redevelopment 187 Hobart HOMO at MONA Likely to 16 Proceed Vibe Hotel Likely to 12 Hobart Proceed Source: CBRE Research, Q3 Opening Date December October 217 May 217 May 218 NEW SUPPLY TO PUT PRESSURE ON RATES Chart 19: Hotel Performance KPIs y-o-y Change 3% 2% 1% % -1% -2% Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 1
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Melbourne OVERALL POSITIVE RESULTS $186 $1 83.% Chart 22: Visitor Nights in Hotels, Motels & Serviced Apartments rolling annual) 2, 1, 1,, Source: TRA, CBRE Research, Q3 MINOR DECREASES IN TOURISM IN Table 8: Supply Pipeline Property Development Type Quality Number of QT Hotel Melbourne 188 Four Points Docklands 273 Park Royal Docklands 281 Aurora Melbourne. Central 22 Source: CBRE Research, Q3 Current Status Opening Date September March 217 July 218 March 219 NEW SUPPLY ON THE WAY Chart 21: Hotel Performance KPIs y-o-y Change 3% 2% 1% % -1% -2% Sep-12 Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 11
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Perth MARKET SLIDE CONTINUES $187 $19 79.8% Chart 2: Visitor Nights in Hotels, Motels & Serviced Apartments 6,, 2, Source: TRA, CBRE Research, Q3 SUBSTANTIAL INCREASE IN VISITORS Table 9: Supply Pipeline Property Quest Fremantle Development Type Quest Harbour Village Extension Quest East Perth Crown Towers Burswood Source: CBRE Research, Q3 Quality Number of Current Status 73 2 13 Opening Date June June August Feb 217 SIGNIFICANT INCREASES IN SUPPLY Chart 23: Hotel Performance KPIs y-o-y Change 1% % % -% -1% -1% -2% Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 12
Visitor nights (s) MARKETVIEW AUSTRALIA HOTELS Sydney CONTINUED PERFORMANCE GROWTH $218 $186 8.3% Chart 26: Visitor Nights in Hotels, Motels & Serviced Apartments 2, 1, 1,, SLIGHT DECREASE IN VISITOR LEVELS DRIVEN BY DOMESTIC DROP Source: TRA, CBRE Research, Q3 Table 1: Supply Pipeline Property Development Type Quality Number of Current Status Park Royal Extension 9 Parramatta Alpha Hotel Eastern. Extension 6 Creek Four Points by Extension 29 Sheraton Sofitel Convention 616 Centre Source: CBRE Research, Q3 LIMITED IMPACT OF NEW SUPPLY Opening Date June July September January 218 Chart 2: Hotel Performance KPIs y-o-y Change 2% 1% 1% % % -% -1% Sep-12 Sep-13 Sep-1 Sep-1 Sep-16 Source: STR Global, CBRE Research, Q3 Q3 CBRE Research CBRE, Inc. 13
MARKETVIEW AUSTRALIA HOTELS AUSTRALIA RESEARCH CBRE HOTELS Liability limited by a scheme approved under Professional Standards Legislation. Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.