ResortBrokers has negotiated the sale of the Quality Hotel Bathurst sold to the MA Real Asset Opportunities Fund in an off-market deal handled by ResortBrokers Central West NSW specialist Chris Kelly.

A fund managed by a subsidiary of the MA Financial Group has purchased the Quality Hotel Bathurst for $9.7 million. The hotel, set on a 4,079 sqm corner block close to the Bathurst CBD at 344 Stewart Street, has been recently substantially refurbished and, in conjunction with the sale, has been rebranded to Accor’s upmarket Mantra brand.

The purchase represents the fourth acquisition by the Fund adding to other accommodation assets acquired in Cairns and southern NSW subsequent to the onset of the COVID19 pandemic.

The off-market deal was handled by ResortBrokers Central West NSW specialist Chris Kelly who said major investors like the Fund and investment syndicates are “actively hunting” for quality assets in his area and other regions across Australia.

“With international travel not possible, many Australians have been forced into shifting their travel preferences to intrastate and interstate visitation with drive tourism becoming a major contributor to this massive shift in accommodation demand,” Mr Kelly said.

“Places like Bathurst are an easy three hour drive from Sydney and, when it’s not in lockdown, on the weekends and school holidays in particular the ‘no vacancy’ signs are up everywhere,” he said.

“It’s pretty much the same story further out in towns like Orange, Mudgee, Dubbo, Forbes and Parkes. These are classic country towns with plenty going on for tourists who can drive to these places.

“Experienced accommodation operators and the syndicates are well aware of this and they are actively hunting for these regional assets and motels, in particular, are high on their wish list.”

ResortBrokers Managing Director Trudy Crooks says these transactions all confirm the fact that experienced accommodation operators are targeting regional motels as part of a major shift in investment strategy.

“These are assets which can be income positive in the short term, while remaining solid cash flow businesses in the medium and long term. Often these regional motels are sitting on prime real estate as well which adds to the appeal.”

One of the biggest plays recently was made by hospitality giant Merivale, with Justin Hemmes as its CEO, which doubled down on its investment on the NSW South Coast with the purchase of The Whale Inn, a boutique hotel and restaurant in Narooma for an undisclosed sum. Hemmes also recently bought The Quarterdeck, a tiki bar set on the shores of Forsters Bay. 

Renowned regional hotelier Greg Maguire invested $12 million in the Powerhouse Tamworth by Rydges which transformed the hotel into the only five-star property in the New England region of NSW.

Regional accommodation investment fund, Mandala Asset Solutions, also recently added to its portfolio of 18 regional assets with the purchase of the Hunter Gateway Motel near Maitland in NSW for $8.5 million and the Lithgow-based Inzitari family bought the freehold to the Bathurst Heritage Motor Inn for $7 million through ResortBrokers to pick up its third regional asset.

“We have 30 brokers covering every state and territory across the country and they’re all reporting the same thing. High buyer demand in the regions is driving the tightening of cap rates and there isn’t enough stock to cover that demand,” Ms Crooks says.

“This indicates that prices in the market are rising and that investors perceive investment in these assets as a low-risk, high reward asset class relative to other options.” 

Ms Crooks said the competition for investing in regional assets is also being driven by the fact that many economic analysts in Australia are predicting a low interest rate environment for at least the next three years which means investors have an even more compelling reason to go on the hunt for new businesses.

“Another key issue is replacement cost. The cost of building new on an existing site, or an acquired site, is prohibitively high for even the bigger operators so these existing regional assets are becoming more and more attractive.

“How many times have you driven into a coastal town and spotted a three and half star motel in a great location right near the beach? This is typical of the type of accommodation being snapped up, done up and rebranded by these operators.”

To request a sales analysis please email either of the selling agents via the below contact details.

77bb9dcd-8caa-42cc-97d6-8ff82da0c136.jpeg