Asian Hotel Investment Returns

According to the results of Jones Lang LaSalle Hotels` annual Top Owner survey, Australian hotel investors and owner/operators continue to dominate the ownership of tourist accommodation in Australia. However, Asian investors have launched a challenge, accounting for 80% of major sales transacted so far this year.

The results of the survey, which spans 132 major owners, 393 establishments and over 66,500 rooms across Australia, show that 59% of Australia`s tourist accommodation is owned by local investors. The survey results will be published as part of Jones Lang LaSalle Hotels` Digest Australia, 2002/03 Edition, to be released this month.
The results demonstrate only one positional change since last year`s survey. United Overseas Land has exited the list through the sale of the Landmark Parkroyal in late 2001, and their place has been taken by Travelodge, through the opening of their 275 room property in Southbank, Melbourne.

The now de-listed Tourism Asset Holdings continues to dominate the ownership of hotels in Australia, with 5,104 rooms, followed by Grand Hotel Group and despite the sale of two properties during 2002, Thakral Holdings has maintained its position as the 3rd largest owner in Australia.

“The interesting fact is that the composition of the Top Owners remains relatively unchanged despite a spate of significant hotel transactions during 2002,” said Mr Geordie Clark, Executive Vice President, Jones Lang LaSalle Hotels. “This demonstrates that new investors are entering the hotel market, in particular, local developers and Asian hotel investors.”

“As predicted last year, the perception that many Australian hotel markets are at the bottom of the hotel cycle combined with the value of the Australian dollar has resulted in renewed enthusiasm from overseas investors, particularly from Asia,” said Mr Clark. Looking at the major hotel sales of 2002, Asian investors accounted for 80.3% of all hotel purchases, but representing only 59.2% of the vendors.


The value of hotel sales for the eleven months to November 2002 represent a 37.6% increase compared to the same period of the previous year. “And, with one month remaining we anticipate a further $150 million in sales to bring the annual total to a robust $844.0 million for the year,” said Mr Clark.

Geordie Clark sees a continuation of transaction activity in 2003 as international buyers try to secure hotels at the bottom of the cycle particularly in Sydney and Brisbane. “We expect Asian investors to again dominate the purchases,” said Mr Clark.

Jones Lang LaSalle Hotels Digest Australia 2002/03 Edition, provides the latest analysis and forecasts for the country`s five major hotel markets. The Digest features an economic report card, tourism market examination, future supply tables and an analysis of investment and management trends.