After a record year in 2015, dominated by several 5 star hotel sales in Sydney and the Eureka hotel portfolio, 2016 continued to generate a steady volume of hotel sales throughout Australia.

In the following report, Colliers International offer details on 50 sales with a total value of $2.7 billion, the second highest result on record.

New South Wales dominated sales volume with around 40% of total hotel sales by value. Major hotel sales in Sydney included the Park Regis City Centre ($46.0 million) and the Vibe Hotel Sydney ($97.0 million). Major suburban sales in NSW included the Mercure Parramatta ($40 million) and the Adina Apartment Hotel in Norwest ($30.6 million).

The largest hotel transaction of the year was the $700 million Ribbon development site acquisition by Chinese Zhengtang Group (now Greaton) in Darling Harbour. The mixed-use development is mooted to include a 400 room W branded hotel.

There was significant activity in the Queensland leisure destinations of Surfers Paradise and Cairns including the Surfers Paradise Marriott Resort & Spa ($70 million), Hotel Grand Chancellor Surfers Paradise ($80 million), Rydges Tradewinds Cairns ($34 million) and Rydges Esplanade Cairns ($40 million) all transacting in 2016. These sales coincided with strong growth in the trading fundamentals from Cairns and the Gold Coast, which were the two best performing markets in the country in 2016 in terms of year on year growth.

When including the Ribbon development site purchase, Chinese mainland investors were the predominant buyer origin for 2016 with 37% of sales by value. This compares to just 6% of sales in 2012. Domestic buyers accounted for approximately 29% by value and Singapore buyers accounted for approximately 18% in 2016.

Over the past 4 years, Colliers International have seen an overall trend in compression of yields; from over 9% in 2013 to approximately 6% in 2016 when taking into account all hotel transactions over $5 million.

2017 is likely to be a year where hotel development deals feature prominently, as investors look for new ways to capitalise on the strength of the sector.

To view the report please click on the below link.

Colliers International Hotel Sales Analysis Report 2016

See also:

Novotel Melbourne Glen Waverley sells for $73.66million in landmark investment

Get to Know Gus Moors, Head of Hotels Australia, Colliers International