Australian Hotel Purchases Hit All-Time High

21st January 2008 (Last Updated January 21st, 2008 05:09)

Hotel transactions in Australia reached an all-time high of A$1.59bn in 2007, according to industry analysts Jones Lang LaSalle. The Australian hotel market saw 37 transactions worth more than A$5m in 2007, including the Grand Hotel Group takeover by Morgan Stanley. Investors

Hotel transactions in Australia reached an all-time high of A$1.59bn in 2007, according to industry analysts Jones Lang LaSalle.

The Australian hotel market saw 37 transactions worth more than A$5m in 2007, including the Grand Hotel Group takeover by Morgan Stanley.

Investors paid an average of A$312,152 per room across the country.

The bulk of investors were domestic-based, but Asian buyers accounted for 35 percent – a significant increase on the four percent recorded in 2006 – Jones Lang LaSalle executive vice president of investment sales Mark Durran says.

“Whilst domestic buyers accounted for most of the remainder (62 percent), this renewed offshore interest has largely been driven by the increased availability of high-quality assets being formally marketed for sale,” he says.

“The higher prospective yields offered by hotels relative to other sectors plus redevelopment potential in many hotel and resort transactions continue to attract more investors.”

In the Asia-Pacific region, transactions doubled to reach US$12.1bn, with Morgan Stanley’s US$2.3bn purchase of Japan’s All Nippon Airways (ANA) hotels portfolio being the largest.

The previous high of A$1.59bn was recorded in 2004.

By staff writer