The year 2018 was one of the most notable in the Melbourne hotel market’s history with activity on every front, according to JLL Hotels & Hospitality Group’s 2018 Melbourne Hotel Market Wrap Up report.

From a trading perspective, the Melbourne market and its various sub-markets exceeded trading expectations and continued to post very high occupancy levels and strong average daily rates in 2018. While RevPAR growth was limited, it still outperformed many other major markets across the country.

Trading statistics from STR Global indicate that in 2018, occupancy levels in Melbourne remained very strong at 84.0% while ADR improved by 0.7% to $198, resulting in a RevPAR of $166 – the second highest of all capital cities in Australia behind Sydney.

Melbourne’s consistently strong trading performance over many years has now gained the attention of a wide spectrum of domestic and international investors, developers and operators.

See also: $130m Hotel Chadstone Melbourne, MGallery by Sofitel opening November 2019

As a result, there were a number of new hotel projects announced throughout the year. This development activity will see the entry of some quality product and highly anticipated brands such as Ritz Carlton, Shangri-La and W, which will greatly enhance Melbourne’s hotel offering and act as a catalyst for accretive ADR growth over the medium term.

The 2018 Melbourne Hotel Market Wrap Up report is available by request only via Peter Harper, who you contact via the below phone or email.

Peter Harper, Head of Victoria for JLL Hotels & Hospitality Group, said, “Whilst investor interest remains at an all-time high, transaction activity was limited throughout 2018 when compared with previous years with only four notable deals occurring for a total volume of just $420 million. However, this was entirely due to a pronounced scarcity of investment grade stock being available on the market for sale.”

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The market’s standout transaction for 2018 was Brookfield’s sale of the 419 room Pullman Melbourne on the Park to iProsperity Group (IPG) for $156 million in a deal brokered by JLL. Bell City in the northern suburbs and the to-be-built Quincy Hotel in the CBD were the other major assets to transact.

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Pullman Melbourne on the Park sold to iProsperity Group (IPG) for $156 million

See also: Melbourne Pullman Park Hotel sold to iProsperity Group

Mr Harper concluded, “Strong demand fundamentals are expected to continue to underpin the Melbourne hotel trading market as well as investment in existing assets over the course of 2019. Investment market conditions should also remain strong, however we note that despite these favorable selling conditions an ongoing reluctance among owners of existing hotels to divest is expected to remain. Therefore, any uplift in transaction activity is likely to be initiated by the developers of the new supply pipeline.”

The 2018 Melbourne Hotel Market Wrap Up report is available by request only via Peter Harper, who you contact via the below phone or email.

See other major projects in the Melbourne:

Marriott's Moxy hotel brand to debut in Australia

Largest Quest Apartment Hotel Opens In Melbourne's Docklands

Shadow Play by Peppers Melbourne Hotel opening April 2019

IHG launches 'voco Melbourne Central' hotel to be part of ‘380 Melbourne’ development

See sold hotels in VIC

Falls Creek and Hotham ski fields sold to Vail Resorts for $174m

BPM Flinders Lane Melbourne hotel project sold to InterGlobe for $91 million

See hotels for sale in VIC:

Wayside Inn Melbourne Hotel for lease - Will Connolly CBRE Hotels

The Leinster Arms Hotel Melbourne Collingwood pub for sale