Trends for hotel investment in Australia in 2018
Tourism investment trends in Australia are increasing as investors find this one of the most attractive and potential investment in 2018.
In recent years, the number of hotels on the outskirts of major cities has been decreasing, leading to the number of inadequate rooms for tourists or short-term business trips. This has led to a decline in hotel sales in Australia over the last seven years. Hotel sales in Asia-Pacific in the first half of 2017 reached just over $ 2.9 billion, lower than in previous years.
Jones Lang Lasalle (JLL) Vietnam recorded about 28 hotel investment deals in six countries, with more than 5,000 rooms, average price per room of all deals of $ 486,600. Foreign investors, however, have led the housing investment market in general, investing in Melbourne’s hospitality industry to new heights in 2017.
New data shows that foreign investment in Australia’s commercial assets is rising again. According to JLL, cities such as Melbourne and Sydney are the most attractive destinations for Australian hotels thanks to a solid tourism base, while balance of supply and demand is balanced in the long run.
Frank Sorgiovanni, director of research for the Asia-Pacific region of JLL, said Hong Kong and Australia are the regional leaders in terms of domestic investment, totaling $ 1.5 billion. . This is due to the strong growth of the tourism industry and the solid business performance that has driven investment in Australia.
According to a recent survey by the Australian Council, ANZ and Property, foreign investors will reduce their investment in housing from 18.5 percent to 15.9 percent in the first quarter of 2018, Hotels and offices will increase by 21.9% and 19.2%, respectively. This suggests that Australia continues to be the preferred destination for Asian hoteliers, with a number of investment opportunities, such as a series of large deals in Sydney and Melbourne recently.
Most of the major deals are traded in Melbourne, with the exception of the InterContinental Sydney Double Bay being acquired by a Chinese investment group valued at $ 104 million – the highest recorded for a single client. suburb of Sydney. In addition, the opening of the International Conference Center will further boost the investment in the Sydney-based MICE and Sydney-based mixed-use (MICE) tourism business, with new supply being very high. .
Hotel transactions in 2018 are expected to continue to be active in Australia thanks to a robust economy. Expected foreign investors in Victoria will create boom fever hotel boom from 19.5% to 28.6%, the number of offices to be increased from 17.4% to 22 , 6%. In New South Wales, more than 26% of hotels were acquired by foreign investors in the second quarter of 2017, but this will not last long and is expected to fall to 23.6% in the first quarter. 2018.
Mark Wizel, CBRE’s director, said that out of the $ 2.3 billion in real estate sales in Melbourne in 2017, 53% of buyers were foreigners. He noted that foreign investors prefer to trade in Victoria, especially in the hotel sector. In addition, he revealed that investment trends in the housing segment are decreasing as Australian banks are restricting loans to foreigners, while most commercial real estate buyers have active capital, Not dependent on bank loans.
Carrie Law, managing director of international real estate website Juwai.com China, said commercial real estate is increasingly popular among Chinese investors because of a more stable valuation than residential property. Over the past two years, commercial real estate investments have increased significantly by high-income individuals and Chinese investment partners. For them, buying commercial property in Australia is like buying interest-bearing bonds almost guaranteed annually.
Ms. Law says Chinese managers are targeting large corporations, often trading up to billions of dollars. China’s investment controls have had a big impact on big companies, which has had a lot of impact on them as they are investing in big deals, such as the Waldorf-Astoria Hotel acquisition. in Manhattan (New York, USA) worth $ 1 billion, even many other billions of dollars in Australia …
However, Mr Wizel said real estate and hotel transactions have been tightened by the Chinese government and included in the “limit list” of offshore investment, which will create favorable conditions for investors. Coming from other countries such as USA, UK, Singapore or Vietnam to jump into this exciting and attractive commercial market in Australia.