Australia in second spot for hotel deals in Q4 2016: Savills
The fourth quarter of 2016 saw investment deals in the hotel space fall 31.5 percent to US$1.79 billion from Q4/2014 (US$2.61 billion), with 51 hotels across 11 countries sold in the Asia Pacific.
However, the total value of investment sales rose by 13 percent year-on-year to US$9.87 billion in 2016 with around two-third of transaction volumes coming from three countries: Japan, Australia and China, according to the latest Savills research on the hotel sector.
Australia had the second highest transaction volumes after Japan with US$1.66 billion, 16.8 percent of the region’s total volume. However, transaction volumes decreased by 31.5 percent YoY, the briefing said.
The year gone by, 2016, was a slow year for major transactions in Australia, with hotel transactions in excess of $2.23 billion (US$1.66 billion) and 62 hotel assets changing hands, a decrease of 31.5 percent when compared to 2015, says Savills.
The average deal size this year was $35.9 million, compared to last year’s $48.3 million. Only eight transactions were recorded in Sydney and Melbourne.
The large majority of the transactions was in the second and third-tier cities such as Surfers Paradise or Cairns.
“Due to tight cap rates in core Tokyo, Hong Kong, Singapore, Sydney and Melbourne transactions, we began to see increases in market share for traditionally non-core assets as investors searched for yield farther afield,” said the Savills briefing Hotel Sales & Investment.
Foreign investor buying remained active, with two major transactions in the last quarter of 2016. The first was the sale of the Travelodge Docklands Melbourne for $107 million (US$81.9 million). The sale price reflected an initial yield of sub-6.0% and was acquired by Singapore’s Sing Holdings.
Another major transaction was an Ibis portfolio, consisting of 15 hotels (1,595 rooms), for a total value of approximately $200 million (US$148.5 million), which was bought by Accor Hotels from the Abu Dhabi Investment Authority.
The portfolio includes the 250-room Ibis Melbourne and the 200-room Ibis Sydney Airport, as well as five Ibis Budget hotels in Sydney, two in Melbourne, and one each in Newcastle, Dubbo, Coffs Harbour, Canberra and Brisbane Airport.
