Cairns hotels in sales frenzy
The Cairns hotel market is expected to continue to ride its recent wave of success, with both the ibis Styles Cairns and the Cairns Student Lodge offered for sale in separate international expressions of interest campaigns.
The listings follow the successful sales of the Pullman Cairns International, the Pacific Hotel Cairns and The Hotel Cairns, which CBRE Hotels senior director Wayne Bunz says represents a level of activity not seen in Cairns for the last seven years.
Cairns and the Gold Coast are two of the strongest performing hotel markets in Australia and have bucked the trend seen in other regional areas of Queensland, such as Mackay, Gladstone and Bundaberg, which have been impacted by the downturn in mining and resources.
Office market: Gold Coast shines as vacancies fall
By comparison, both Cairns and the Gold Coast have seen an influx of investor activity due to the lower Australian dollar improving inbound tourism and the number of Australians holidaying at home.
CBRE Cairns managing director Danny Betros says: “The (Cairns) hotel market has emerged as one the best performers in the country, exceeding market expectations and recording a strong recovery from a low base.”
Bunz and Betros have been exclusively appointed to sell the ibis Styles Cairns and the Cairns Student Lodge properties.
Both properties have occupancy rates of around 80%, with industry experts tipping bids of around $10 million for the ibis Styles Cairns, while the Cairns Student Lodge is predicted to attract bids of around $7 million.
Bunz says the Cairns hotel market is rebounding strongly, with record occupancy levels underpinning buyer demand for hotel investment opportunities.
The (Cairns) hotel market has emerged as one the best performers in the country, exceeding market expectations and recording a strong recovery from a low base
He says the market is drawing an unprecedented volume of Asian capital currently targeting opportunities in Australia.
“Asian buyers who understand and respect hotel assets as an alternate asset class are reaping the rewards with strong hotel performance off the back of rising tourism levels boosted by a softening Australian dollar,” Bunz says.
The 321-room Pullman Cairns International was sold in May to Melbourne-based Shakespeare Property Group for $75.08 million, equating to a rate of $223,000 per room and a yield of about 8%.
The 176-room Pacific Hotel Cairns sold in July for $25 million, while The Hotel Cairns sold late last year for about $9 million after more than 130 international and domestic buyers showed interest in purchasing the 92-room hotel.
The ibis Styles Cairns, which has undergone a $250,000 refurbishment this year, features 75 rooms and facilities including a restaurant, bar, meeting room, tour desk, swimming pool and BBQ area.
The hotel is located on Florence St, close to the Cairns Esplanade and directly opposite the Cairns Civic Theatre, a 24-hour medical centre and the $35 million Cairns Aquarium, which is currently under construction.
Cairns Student Lodge is a 76-unit, 231-bed dedicated student accommodation complex with facilities including a dining area, swimming pool, conference rooms and entertainment and BBQ areas.
The property is located opposite James Cook University on a 11,824sqm freehold site and offers vacant possession.
The expressions of interest campaign for Cairns Student Lodge closes on 16 September, while the campaign for the ibis Styles Cairns closes on 23 September.