Off-market hotel deals tipped to turn over at least $1.5bn
BILLIONS of dollars worth of Australian hotels are being offered to investors in a series of off-market deals, with analysts expecting the sector to turn over at least $1.5 billion this year.
“We have looked at close to $1bn worth of hotel properties since December in all Australian states. Interestingly there’s quite a lot of hotels being offered through off-market transactions at the moment,” said Victoria Clent, managing director of Aligned FM.
The Sydney-based funds manager has a mandate from a wealthy Malaysian family to buy $250m worth of Australian investment hotels by the end of the year. Aligned FM has already acquired an Ibis Hotel in Perth and two Chifley hotels in NSW for a combined $66m for the Kuala Lumpur-based family.
Apart from the Malaysian clients, Ms Clent and her business partner Glen Boultwood, previously with Eureka Funds Management, have attracted several wealthy global investors interested in acquiring Australian real estate as a long-term investment. “There has been a market for large trophy asset sales in recent years,” Ms Clent said.
“There’s (also) a big market for mid-market hotels; there’s a huge amount of interest from overseas because of the yield you can get in Australia. There’s starting to be a lot more interest in the fact that hotels are a low-risk high-yielding property class.”
Ms Clent said she was looking for more hotel investments on behalf of the Malaysians.
CBRE Hotels senior director Wayne Bunz said there was plenty of liquidity in the market and he expected another strong year. “Probably $1.5bn worth of hotels will trade this year, there is a strong appetite from domestic and internationals, particularly the wave of Chinese money that see Australia as a strong safe haven,” Mr Bunz said.
“If you look back in the last seven years a lot of people have made a lot of capital gains out of buying hotels and reinvesting into them.
“During the global financial crisis there was not one corporate hotel that went into receivership or experienced any major financial difficulty.’’
Jones Lang LaSalle Hotels is marketing Sydney’s Hilton Hotel with price expectations of more than $450m. Expressions of interest close later this week.
JLL Hotels offloaded the Sheraton on the Park Hotel in Sydney for a record $463m to a Chinese insurance firm last year. Singapore’s GIC is selling the five-star Westin Hotel.
However, some agents doubt there will be many larger hotel offerings in the next few years given many have been bought by Asian players. “Most Asian groups develop very long-term hold patterns,” said one agent.
Source: The Australian - 28th January 2015
