This article is from the Australian Property Journal archive
ROOM supply in the Australian hotel market has risen by 1.3% over the year to June 2013 to the highest level ever recorded, according to Jones Lang LaSalle’s latest Top Owners and Operators survey results.
Of the 230,064 accommodation rooms in Australia, the top 10 owners accounted for 11.3% (26,085 rooms) of total supply at the end of 2013 and the top 10 operators 40.7% (93,691 rooms).
Rooms owned by the top 10 owners have increased at an average rate of 1.4% per annum since 2000, in line with the growth in total accommodation supply, whereas the top 10 operators have grown at a stronger rate averaging 5.9% per annum. Both recorded growth in 2013.
Australia’s Top 10 Owners recorded a 1.0% increase in rooms in 2013 with the net increase of 267 rooms.
JLL Hotels & Hospitality Group Australasia CEO Craig Collins said there was one new entrant into the top 10 owners in 2013. Abu Dhabi Investment Authority (ADIA) was catapulted into the top position after buying Tourism Asset Holdings (TAHL) portfolio of 4,352 rooms across 33 hotels, which are leased to Accor.
Collins said offshore groups now account for 53% of rooms owned by the 30 largest accommodation owners in Australia.
“International investors have made significant in-roads to Australian hotel real estate over the past five years as Australian funds have sold down their hotel real estate holdings. The successful sale of the Four Seasons Sydney by JLL’s Hotels & Hospitality Group in 2013 for Eureka Funds Management saw Eureka exit the top 10 owners list, marking the end of an eight-year run,” he added.
Meanwhile Harry Triguboff’s Meriton Serviced Apartments (MSA) moved into second place following the opening of two new properties – MSA Brisbane on Heschel St (259 keys) and the MSA North Ryde (210 keys). Meriton Serviced Apartments now operates 13 properties with 3,257 rooms and with more in the pipeline.
In terms of operators, the top 10 operators increased portfolio holdings 2.5% (2,274 rooms) bringing the total rooms under management to 93,961 across 963 properties. However, four companies recorded double-digit growth with the most significant gains by Toga Hospitality (30.4%), Hilton (27.9%), Best Western (12.1%) and Oaks Hotels & Resorts (10.7%).
JLL found Toga Group jumped from seventh to fifth place following significant merger and acquisition activity, including joint ventures with Far East Orchard.
In addition to new development and management conversions, eight Rendezvous properties were moved by Toga portfolio, bringing the total number of rooms under management to 7,455, a 30.4% increase.
At the same time, Hilton Hotels added four properties (851 rooms) to its portfolio and introduced its DoubleTree by Hilton brand into Australia, resulting in a ranking of 10th.
JLL Hotels & Hospitality Group asset management senior vice president Ross Beardsell said this represents a marked change with strong growth by domestic groups evident over the past 10 years.
“Domestic groups now account for 46% of the rooms operated by the 30 largest Australian accommodation operators. This compares to just 23% in 2000.
“As globalisation trends take hold, the Australian operating profile could shift again with an increasing number of international delegations (notably from Asia) scouting for opportunity. Serviced apartment operators view the market as particularly lucrative given the size of this well-established segment, as well as lower barriers to entry in gateway cities when compared to hotels.’ Beardsell concluded.
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