Date: July 2018
Location: Sydney, Melbourne, Canberra, Brisbane, Perth and others, Australia
Name: Tourism Asset Holdings portfolio – 24 real estate assets
No. of Keys: Over 2,000
AccorInvest has launched one of the biggest deals of the year in the hotel sector with the sale of 24 assets and six lease holdings that could garner more than AUD$300 million.
It is part of the former Tourism Asset Holdings portfolio and could be sold in one line or separately. AccorInvest is part of the Paris-based AccorHotels and is selling to focus its attention on the overseas properties.
The ibis budget portfolio is a small percentage of the overall global AccorHotels business.
The sale comes as the Australian hotel market is riding high with high occupancies generated from increasing inbound tourism and domestic travellers looking to do more ”staycations” in their own country.
While there is a development boom underway across Melbourne and Sydney, travel and tourism experts and hotel operators say there remains a shortage of rooms.
The portfolio consists of 23 real estate assets and lease interests located across Sydney, Melbourne, Canberra, Brisbane and Perth, together with several major regional cities.
It is being sold through JLL hotels & hospitality group’s Craig Collins and Peter Harper.
The agents said all of the hotels within the portfolio are currently operated by AccorHotels, Australia’s largest hotel management company, under hotel management agreements.
AccorHotels’ Paris head office this year expanded its footprint across Australia through the $1.2 billion takeover of the listed Mantra Hotel group. The deal also gave it a larger presence in regional areas.
Likely buyers include high net worth investors such as Dr Jerry Schwartz who has a large hotel portfolio including the Sydney Sofitel Darling Harbour, iProsperity, Impact Investment Group, M&L Hospitality and other Asian-based businesses which have been active in the Australian hotel market.
Individually, the portfolio encompasses 17 real estate assets comprising 1,797 rooms of which four are branded as ibis hotels and the other 13 ibis Budget hotels. Well-known assets include the ibis Hotel & Apartments Melbourne, ibis Sydney Airport, ibis Budget Sydney Olympic Park and ibis Newcastle.
The six lease interests include The COMO Mgallery by Sofitel in Melbourne, the Novotel Brisbane, Mercure and ibis hotels in Brisbane and the Mercure and ibis hotels in Perth.
Mr Collins, chief executive Australasia, JLL hotels & hospitality group, said it was the first time such a offering has been presented to the open market in Australia.
”The pure scale of this portfolio and its diversity, in terms of location, market positioning and income profile, presents investors with an opportunity to immediately establish an unparalleled foothold in one of Asia Pacific’s most highly sought after hotel investment destinations,” Mr Collins said.
“Economy hotels are a highly proven and successful hotel model in the Australian market. Their typically low operating costs and high level of profitability make them very attractive investments.
Mr Harper, the executive vice president, JLL hotels & hospitality group said all of the real estate assets in the portfolio are well established in their respective markets and occupy a combined 54,500 square metres of land.
”Furthermore, there is significant potential for both trading and capital value upside as, in addition to ibis Melbourne Hotel & Apartments and Ibis Sydney Airport in particular, a number of assets are positioned in key economic growth areas,” Mr Harper said.
”The sale offering comes at a time when the Australian hotel market is experiencing unprecedented investor interest and we expect that a wide range of groups will be drawn to the very attractive fundamentals of the individual hotels and portfolio as a whole.”
It is expected the buyer of the leasehold will either renegotiate with the operator at the end conclusion of the lease, to extend or look for another use, if appropriate.
THPT Comment: With the Mantra AUD$1.2bn acquisition and US$1bn announced, also today, investment into Africa, I guess $300m is a relatively small amount of cash to realise.
First Seen: Sydney Morning Herald