Fall in Liquidity, Rise In Development

2019 transaction volumes are expected to come in below the long-term yearly average of $1.9 billion, while the development pipeline remains significant


Key points:

  • Australian hotel transactions expected to be c. $1.5b for 2019

  • June YTD saw $500m worth of deals with another $750m in the pipeline

  • Although transaction volume may tumble, large level of development planned or underway


Australia is experiencing lower levels of hotel liquidity, with JLL Hotels forecasting only $1.5b in deals for 2019 - below the historical average of $1.9b.


Only eight hotels worth approx. $550m transacted for the first six months of the year. JLL estimates another $750m will change hands in 2019.


This represents a drastic drop since the market peaked in 2015, when $3.5b changed hands, with the notable sales of The Westin Sydney and Hilton Sydney for over $400m each.


More recently, transaction volumes for 2017 and 2018 were $1.5b and $1.8b respectively.


Major 2019 hotel deals include:

  • Felix at Sydney Airport - c. $61m

  • Next Hotel Melbourne (part of 80 Collins St Devt) - c. $1b (including retail / resi)

  • Next Hotel Brisbane - c. $150m (including retail)

  • MACq01 Hobart - c. $50m

  • Novotel Glen Waverley - c. $150m (including shopping centre)

  • LinQ Hotel Development - c. $45m

Anticipated 2019 deals include:

  • AccorInvest's 23 hotel portfolio - c. $300m

  • Sofitel Sydney Wentworth - c. $300m


Although transaction volume may tumble, there remains a large level of development planned or underway. Major announcements include:


Melbourne

  • AC Hotels by Marriott - 200 keys

  • Hilton Melbourne Square - 600 keys

  • Hyatt Place in Caribbean Park - 170 keys

  • Ibis Styles/Novotel Melbourne Airport - 464 keys

  • Oakwood hotel in Dandenong - 98 keys

  • Veriu in Collingwood - 95 keys

  • Veriu at Queen Vic Market - 111 keys

  • Yotel Melbourne Southbank - 244 keys


Adelaide

  • Ramada by Wyndham Playford - 205 keys

  • TRYP by Wyndham - 124 keys


Perth

  • Art Series Hotel, The Adnate - 250 keys

  • Ibis Styles East Perth - 252 keys

  • Moxy Perth - 150 keys

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