Accor floods hotel market with assets worth $1.1bn

At least $300 million of budget Ibis-branded properties are up for sale.
At least $300 million of budget Ibis-branded properties are up for sale.

The Australian real estate sector is awash with hotels for sale with at least $1.1 billion worth of Accor-branded hotels hitting the market, including at least $300 million of budget Ibis-branded properties that were launched into the market yesterday via the French giant’s investment portfolio. 

AccorInvest is selling its entire Australian hotel portfolio to focus on its European assets. The 23 hotels and leased properties hitting the market comprise 1800 rooms in Melbourne, Sydney, Newcastle and Sydney Olympic Park, to be sold in one portfolio or piecemeal.

Separately, at least $600 million is also expected from the sale of the Abu Dhabi Investment Authority’s 600-plus room offering at Sydney’s Homebush, which includes the 177-room Novotel Olympic Park, the 212-room Pullman at Sydney Olympic Park, and the 144-room Ibis Sydney Olympic Park. ADIA’s decision to sell shows the group’s willingness to capitalise on the top of the hotel investment cycle.

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The entire Olympic Park hotel portfolio, which was initially developed in the late 1990s for the Sydney 2000 Olympic Games, is operated by the French hotel giant Accor under what is understood to be 50-year management deals.

Pullman on the Park hotel Melbourne

The Pullman on the Park hotel in East Melbourne has been listed for sale with expectations it will top $200 million.

The 156-room Ibis Budget Sydney Olympic Park, previously operated as a Formula One hotel, is also expected to be included in the sale. Expressions of interest closed last week.

In Melbourne the Accor-managed Pullman is on the market with a $200 million price tag. The sale through JLL Hotels and McVey Real Estate is to be announced soon.

JLL Hotels agents Peter Harper and Craig Collins have also launched the sale of the AccorInvest properties, which involves 17 real estate assets comprising 1797 rooms in mainly Ibis or Ibis Budget hotels.

The six leased properties owned by AccorInvest, the investment arm of Accor, include the COMO MGallery by Sofitel in Melbourne, the Novotel, Mercure and ibis hotels in Brisbane and the Mercure and ibis hotels in Perth.

Collins, chief executive of JLL Hotels & Hospitality Group, says economy hotels were a highly proven and successful hotel model in this market.

The ibis Melbourne will be sold as part of the AccorInvest portfolio.

“Their typically low operating costs and high level of profitability make them very attractive investments.”

Harper, executive vice president of JLL Hotels, says there was significant potential for both trading and capital value upside.

The sale includes the 75 room Ibis Budget Canberra and the 200 room Ibis Sydney Airport Hotel.

The market offering comes as Sydney hotels experience strong trading performance driven by record international tourist arrivals.

However, sales volumes have been well down. There were 45 hotel sales in 2017, worth $1.63 billion, down from 71 hotel sales in 2016 worth $2.51 billion, and 73 transactions in 2015 worth $3.47 billion, according to a Savills Hotel Market 2018 report.

– with Ben Wilmot

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