Hotels hit the market

The Australian property market is awash with hotels.

The big driver of the boom is at least $1.1 billion worth of Accor-branded hotels which have now been put on the market.

The French giant’s investment portfolio includes at least $300 million of budget Ibis-branded properties.

AccorInvest plans to focus on its European assets so it is selling its entire Australian hotel portfolio comprising 23 hotels and leased properties with 1800 rooms in Melbourne, Sydney, Newcastle and Sydney Olympic Par. These will be sold in one portfolio or piecemeal.

At the same time, the sale of the Abu Dhabi Investment Authority’s 600-plus room offering at Sydney’s Homebush, which includes the 177-room Novotel Olympic Park, the 212-room Pullman at Sydney Olympic Park, and the 144-room Ibis Sydney Olympic Park is expected to fetch at least $600 million, capitalising on the top of the hotel investment cycle.

French hotel giant Accor has been operating the entire Olympic Park hotel portfolio, which was initially developed in the late 1990s for the Sydney 2000 Olympic Games under what is believed to be a 50 year management deal.

The 75 room Ibis Budget Canberra and the 200 room Ibis Sydney Airport Hotel will be up for sale. Also, the 156-room Ibis Budget Sydney Olympic Park, previously operated as a Formula One hotel, is also expected to be included in the sale with expressions of interest closing last week.

Added to that is the Accor-managed Pullman which has been put on the market with a $200 million price tag. The sale will be managed through JLL Hotels and McVey Real Estate.

Mr Collins, chief executive of JLL Hotels & Hospitality Group, said economy hotels were a highly proven and successful business model in the Australian market.

“Their typically low operating costs and high level of profitability make them very attractive investments,” Mr Collins told The Australian.

Leon Gettler - 25th July 2018