Asian investor snaps up Mercure Parramatta
The Mercure Parramatta has been sold to a private Asian investor for $40 million.
The Mercure at 106 Hassall Street sits on a 4997 square metre freehold site. The hotel offering includes meeting and conference rooms, a restaurant and terrace bar, outdoor swimming pool, spa, floodlit tennis court and undercover parking for up to 160 vehicles. Also, it offers room for a possible expansion or redevelopment
The four-star, 165-room hotel is managed by Accor.
It operates under the Mercure brand via a management agreement extending until 2021.
The sale was wrapped up by CBRE Hotels director Andrew Jackson, who said there had been a lot of interest from prospective buyers.
"Parramatta is becoming one of the go-to locations for investors seeking to move away from the tightly held Sydney CBD market and into a more affordable area," Mr Jackson told the Sydney Morning Herald.
He said the area was “set to grow substantially over the coming years."
"With occupancy rates in the CBD hovering about the 86 per cent mark and room rates being in the region of $230 a night, the potential for growth in the Parramatta hotel market is significant," he said.
He said that the high rates charged by Sydney’s CBD hotels would see suburban operators increasing their own rates while marketing themselves as the cheaper alternative to the city.
Mr Jackson said hotel investment opportunities throughout the broader Sydney market were being driven significant increases in tourism volumes, both international and domestic.
Investors are particularly interested in the area because of limited supply. Add to that the development of Sydney’s second airport at Badgerys Creek. The Parramatta CBD, which is now Australia’s sixth largest city, has already attracted a lot of commercial development.
According to CBRE, Australia’s hotel market in Australia is split.
On one side, there are cities such as Darwin, Brisbane and Perth suffering from oversupply. And then there are cities such as Cairns, the Gold Coast and Sydney where demand is outstripping supply.
by Leon Gettler, July 7th 2016
