International Capital Flows Continue to Reach Australia

2020 produced, upon any fair reckoning, an unexpected whirlwind of challenges for all investment classes; but most notably in the Australian Accommodation and Travel space. HTL Property analysts have tabulated the consolidated sales data for the prime investment markets regarding both 2019 and 2020; and which has highlighted some interesting results.

“Given the International and Domestic travel restrictions imposed throughout 2020, it is thought-provoking to recognise that a comparatively not dissimilar percentage of Australian Hotels sold found their new homes within offshore capital sources when considering total sales for both 2019 and 2020. Accordingly, the perforated 2020 period recorded an ‘offshore’ investor decrease of only 1% when compared to the previous 12 month period” advised HTL Property Asia Pacific Managing Director, Andrew Jolliffe.

“Pleasingly, therefore, these statistics show that the challenging amalgam of CV-19 and resultant border closures haven’t discouraged international investment in Australia to the prima facie extent one might have otherwise ascribed. Hence, the deliberate drive to invest in the Australian Accommodation and Tourism market is as strong as ever; particularly given the still economically priced Australian dollar, attractiveness of local interest rates and confidence in the long term prospects for the sector” Jolliffe concluded.

“With regard the patent new origins of capital entering the Australian hotel market, the demand for Accommodation acquisitions has increased with 37.50% of all sales in 2020 to first time investors in the hospitality market; indicating the clear magnetism for investors seeking yield in a stable, low interest rate environment” added HTL Property Director, Nic Simarro.

In summary:

^ 2019 consolidated hotel transactions exceeded $2b, compared with 2020 consolidated sales of c.$825m – with 2020 representing approximately 35% of the sales volume of its chronological predecessor.

^ Given the current demand from both Domestic and Offshore Investors, we anticipate 2021 to conclude more transactions than did 2020; at the same time as welcoming a comparatively greater number of new entrants into the national Hotel space.

^ Although traditional hotel investors are clearly still seeking opportunity within the Accommodation and Tourism landscape, Vendors should consider live marketing campaigns in order to address and engage with new origins of capital entering the industry.

End.

Click here to view the 2019 & 2020 Accommodation Hotel Investment Breakdown Analysis