Regional properties are up for sale and are meeting investor demand and investors continue to seek out assets outside major CBD areas, in search of greater yields and capital growth, according to Jones Lang LaSalle Hotels.
Jones Lang LaSalle Hotels has listed three prominent regional motels for sale as investor demand remains strong for quality hotel and motel properties.
Mr Marcello Jimenez of Jones Lang LaSalle Hotels is offering for sale Sundowner Paddlesteamer Albury and Country Comfort Wagga Wagga, as well as Country Comfort Bathurst.
The offering could suit an investor seeking a high yielding property portfolio or alternatively each of the motel freeholds and businesses would appeal to hands-on owner operators who could operate these motels more profitably. "These properties are all excellent assets within their strong regional centres of Wagga Wagga, Albury and Bathurst," said Mr Jimenez. He added, "We anticipate strong interest from both entry-level and experienced moteliers for these assets."
Country Comfort Wagga Wagga boasts 86 rooms, a restaurant, bar and conference facilities to accommodate up to 400 delegates. "The motel has outstanding exposure with its prominent location and is one of the largest regional hotels to come on to the market in recent times," said Mr Jimenez.
Over the last five years, tourist accommodation performance in the Wagga Wagga region has remained very strong with CAAG in RevPAR of 5.8%p.a.. "This excellent growth in RevPAR has come largely on the back of growth in the Average Daily Rate (ADR) which has increased on average by 5.2% p.a. over the last five years and having no periods of decline," said Mr Jimenez.
The 61-room Sundowner Paddlesteamer Albury features a bar, restaurant, conferencing and coach facilities. "An incoming owner will also benefit from the adjoining development land (approx 4,700sqm) which is zoned for multiple use," said Mr Jimenez. He added, "The motel enjoys an excellent location in a strong performing city." Over the last five years, tourist accommodation performance in the Albury region has remained consistent with Compound Annual Average Growth (CAAG) in RevPAR (Revenue per Available Room) of 4.1% p.a..
Both the Country Comfort Wagga Wagga and Sundowner Paddlesteamer Albury properties are run under full management by the Constellation Group but are being sold with vacant possession of management.
The 50-room 4.5 star Country Comfort Bathurst is widely recognised as one of Bathurst's leading hotels. The property occupies a prime location, situated on the corner of the Mitchell and Mid Western Highways. Some of the existing features include a swimming pool, conference facilities and an award wining restaurant that overlooks the picturesque township.
Regional cities with strong corporate demand are highly sought after by investors seeking higher yields; in particular properties that have over 50 rooms as they can be purchased by passive investors and run under management.
"Many investors see upside through a renovation and/or re-branding program that may generate yields that are not necessarily achievable in major cities such as Melbourne, Brisbane or Sydney," said Mr Jimenez.
Rising construction costs have made it difficult for developers to build accommodation properties and coupled with recent interest rate rises, supply is expected to remain in balance for the medium term. "As room rates continue to increase across the board, we see ‘good' buying opportunities for investors who can still purchase assets for up to 10-20% below replacement cost," said Mr Jimenez.