Asian investors snapping up Australian hotels
New figures indicate that Asian investors are aggressively snapping up major hotels in Australia's capital cities.
So far this year, Asian entities have acquired close to a billion US dollars worth of Australian hotels.
That amounts to about 90 percent of the transactional volume for the year to date.
The Chief Executive Officer of Jones Lang Laselle Hotels Australasia Craig Collins says Asian investors have the capacity to spend big.
"Asian investors are cashed up, especially right now. Despite a number of Middle Eastern and American groups actively seeking hotels here of late, Asian groups continue to dominate the market.
"They love Australian hotels and in general with their proximity geographically, they can keep a close eye on their assets," he said.
The Regional Director of CBRE Hotels Rob Cross says investors from the region view Australia as a safe haven to park their capital, to avoid economic and social volatility in other parts of the world.
"And secondly, the Australian property market is seen as very transparent. It is a simple market, a transparent market which again relates back to the fact that it is a safe property investment destination.
"So I guess if you compare some of the Asian countries like Thailand, Malaysia etcetera, where there is potentially volatility in some of their domestic economies, a lot of volatility in the northern hemisphere, they tend to look down somewhere here as somewhere safe to park some capital," said Mr Cross.
A standard measure for the health of the hotel industry is the revenue attained from every available room.
Deloitte Access Economics is forecasting this to rise by 5.5 per cent annually over the next three years, resulting in $AUD110 per room by the end of 2014.
Bright Future
Mr Collins says the future is looking bright.
"Overall we are predicting growth across the country. Different markets have different growth. But we are in very good space, very limited new hotels are being built across the country,
"Demand is steadily rising especially in the corporate market and so far, it is a very positive outlook for Australian hotels," he said.
But Rob Cross from CBRE Hotels says the figures do not tell the whole story.
"What we have here is a two-speed economy in the hospitality sector, overall like our own economy I guess,
"Our corporate market hotels of Sydney, Melbourne, Perth, Brisbane, Canberra etcetera have had substantial growth for the last three to four years. Business is extremely strong for those areas. and they are getting very, very good growth,
"Conversely, if you look at our leisure sector, when I talk leisure sector, you are talking about the likes of Gold Coast, Sunshine Coast and far north Queensland. They have really struggled in the last five years for a number of reasons. The major one has been the strength of the Australian dollar that has really hurt them," he said.
Source: ABC News, 19 July 2012
