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Australian hotel investment to hit record levels in 2016

Hotel investment sales in Australia is predicted to hit more than AU$4 billion (US$2.8 billion) in 2016 as the tourism boom brings in new investor groups from US, UK and Europe, according to the Australian Financial Review.

CBRE Hotels director Wayne Bunz said he expected investor appetite to spread beyond the CBD markets in Sydney and Melbourne to markets such as Cairns and the Gold Coast, which will bring another “record year of investment”, Bunz says.

Overseas and domestic tourism, along with the weaker Australian dollar has been the driving force for the continued increase in investment. Luxury hotel occupancy rates reached 90 percent in Sydney and Melbourne and room rates surged above $300 a night, according to STR Global.

Savills managing director of hotels for Australia and New Zealand, Michael Simpson said there will be more global buyers competing for the same pool of assets, which will further drive up hotel values and tighten yields in 2016.

"We are starting to see the strong re-emergence of traditional older school investors from the US, UK and Europe who want to own hotels in Australia," Simpson was quoted by Australian Financial Review.

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