Hotel Transactions
HOTEL INVESTORS RIDE OUT ECONOMY AT HIGH END OF TOWN AS PREMIUM ASSETS REDEFINE MARKET.
Colliers Hotels Transaction Services
AUSTRALIAN HOTEL TRANSACTIONS 2020 TO 2024F Source: Colliers
Transaction volumes for Premium hotels increased by 20.9% last year, as investors bet on continued high-performance and resilient pricing, according to Colliers.
across the hotels market, ensuring investment volumes held up well last year compared to other commercial property asset classes, decreasing only 7% compared to 2022 to $2.4 billion. “While established portfolio hotel owners accounted for 87% of transactions in 2023 and acquired all ten Premium assets on the market, the hotels sector continues to attract new investors with lower cap rate expansions and more capital targeting quality opportunities across the burgeoning sector.” In a marked turnaround, domestic investors accounted for 77% of transactions last year, a level of deal flow which has not been witnessed since 2006, for this buyer segment. However, offshore investors are expected to play a more active role over 2024, expanding on the $30 billion of Premium hotels they currently own. Many opportunistic funds held onto dry powder or
Australia’s growing Premium hotels segment defies the uncertain economic climate and proves crown jewel of the market, with the transaction volume for hotels over $50 million reaching $1.53 billion or 63% of overall hotels investment last year. An increase in the Premium hotel transaction volume by 21% in 2023 ensured the average hotel sale jumped 19.1% to $41.8 million over the same period, as pricing for Premium properties in gateway cities and leisure markets remains robust, according to Colliers Head of Hotels Transaction Services Karen Wales. “Investors see the opportunity presented by improving demand levels, which supported increases in room rates across key markets of 20-50%, compared to 2019.” Ms Wales said. “Positive sentiment around recovery in travel and asset performance continue to be key investment drivers
8 – April / May 2024
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