What’s happening in the hotel industry?

New hotel rooms are forecast to increase accommodation supply by 1.6% a year until 2018 if proposed developments go ahead, the latest research from JLL shows.

In the potential pipeline are 2363 extra rooms in Melbourne, 1943 in Brisbane, 1087 in Sydney, 914 in Darwin and 700 in Adelaide.

But JLL reports that the probability of all mooted hotel projects going ahead is low “as feasibility hurdles will become more challenging”.

Projects not designed to meet an identified need will struggle to appear viable, the report says, adding that new rooms have grown on average by just 1% across the past decade.

Projects not designed to meet an identified need will struggle to appear viable.

Viability of existing hotel operations climbed Sydney, Melbourne and Hobart for the year to May 2014, using the RevPAR metric.

It’s calculated by multiplying a hotel’s average daily room rate by its occupancy rate.

Sydney hotel performance rose 17.6% while Melbourne and Hobart over-performed about 10% for the 12 months.

RevPAR was weak in Canberra, Adelaide, Darwin, Brisbane and Perth, which recorded the largest drop in performance of all capital cities at 7.4% lower.

Meanwhile, Perth’s 69-room Criterion Hotel recently exchanged hands between two Singaporean-related parties for $16.5 million.

Agents JLL say the four-storey, historic hotel was sold by Gemtower Holdings to Sunland Australasia Properties.

Gemtower bought the hotel for $4 million in 1995 and added a 134-apartment block on site.

Also for sale in Perth is Tourism Property Investment’s Ibis Budget Hotel, which is available on a stand-alone basis or with its counterpart in Melbourne, which is also on the market.

Agents CBRE say TPI last month sold its Ibis Windsor hotel in Brisbane. The hotels are managed by Accor Asia Pacific.

In Sydney, the new Sofitel Darling Park will join the Schwartz family stable of properties when it’s finished in 2017.

The new Sofitel Darling Park will join the Schwartz family stable of properties.

Also operated by Accor, the Darling Park hotel will be the largest new hotel in Sydney for 20 years, according to agents Savills Australia.

The Lend Lease-developed hotel is expected to fetch $360 million and it’s believed the Schwartz portfolio will shed its Mascot airport Holiday Inn to fund the purchase.

Further south in Melbourne, Quest says it is on track to complete its corporate accommodation project near Tullamarine airport in October.

The 96 serviced apartments are being built by Merkon Constructions in the Melbourne Airport Business Park, on the corner of South Centre Rd and Annandale Rd.

It has a mix of studio, one, two and three-bedroom units each with kitchen and laundry facilities, Foxtel and Wi-Fi connections.

Quest Melbourne Airport is one of 10 Quest projects to open this year around the nation.

Clearance rates hover around 50%

Just more than half of the 47 commercial properties auctioned last week sold, which was down slightly on the same time last year, according to RP Data

The clearance rate of 55.3% was also below the previous week’s rate of almost 60%.

“At the same time last year, a comparable clearance rate was recorded (56%), however the volume of properties taken to auction (75) was much higher,” RP Data says.

There were 155 sales out of 271 auctions in the past four weeks. A sale price was reported for 115 of the successful auctions. The reported total that changed hands was $256 million.

Infill site attracts developers

CBRE received almost 40 enquiries for a former aged-care facility in Melbourne’s Croydon North that sold at auction for $1.8 million.

The 4265sqm site with a 1500sqm building on the Maroondah Highway was sold under instruction by the mortgagee.

CBRE’s Paul Tzamalis says the level of interest in the property indicated that investors were  “looking to unlock the long-term development potential of infill sites … across Melbourne”.

Highway to investor heaven

A private Melbourne syndicate has bought a Warrego Highway truck stop, 300km west of Brisbane, for $10.1 million.

Anchored by a Caltex petrol station, the 10,500sqm Village Travel Centre in Chinchilla also hosts fast-food outlets KFC and Subway, Coffee Club, Bottlemart and Sunshine Kebabs.

Agents Colliers International say the centre provides yearly combined rent of more than $860,000.

Proposed on the 3.3ha site next to the truck stop is a 68-room motel and a camp complex for nearly 200 people.

Colliers says the section of highway near Village Travel Centre, in the mining region of the Surat Basin, is expected to have a three-fold increase in traffic over the next 20 years.

The agency believes the syndicate is keen to buy more service stations with onsite national tenants plus shopping centres anchored by major supermarkets.