Brisbane-based property investment company Mahil Group has acquired the Ibis Budget Windsor, showcasing increasing confidence in Brisbane’s hospitality sector.

The acquisition represents the investor’s third venture in the city, expanding their existing portfolio that already includes the Pegasus Motor Inn and Alloggio Hamilton.

CBRE Hotels’ Wayne Bunz and Hayley Manvell brokered the sale, which reflects an initial yield of 4.5%.

Situated on a 2,100 sqm inner-city freehold land parcel, the 3-star budget hotel features 50 guest rooms, a one-bedroom manager’s residence, a dining area (offering a breakfast buffet), a reception, guest laundry facilities, and on-site car parking for 40 vehicles.

The hotel is near several essential corporate and leisure demand drivers, including the RNA Showgrounds, Brisbane CBD, Fortitude Valley, sporting venues, and hospitals.

“Everyone wants to be in Brisbane and Queensland. Brisbane has had, and will continue to have, an extraordinary growth story. Over the past 10 years, Brisbane’s population has grown faster than any other major Australian capital city—a trend forecast to continue over the next 10 years,” Mr. Bunz said.

“Demand continues to outstrip new hotel supply, and with substantial capital committed to Brisbane’s infrastructure pipeline in the lead-up to the 2032 Olympics, astute investors like Mahil Group will capitalize on Brisbane’s strong capital growth potential and burgeoning tourism sector.”

Ms Manvell added, “Currently, the value proposition of purchasing existing accommodation far outweighs development, as construction costs continue to rise, and replacement costs far exceed existing asset purchase prices.”

“Brisbane’s hotel supply remains constrained compared to previous cycles, primarily due to the significant cost of construction for new projects. There are approximately 1,440 rooms across eight projects in Brisbane’s hotel supply pipeline. However, nearly 60% of this total stock is part of the Queen’s Wharf development, with over half of the new supply currently under construction, and the remaining projects still under consideration.”