Monster 23-hotel portfolio to hit the market

A huge hotel portfolio comprising 23 properties is set to hit the market, in an offering that could be the hotel industry’s largest of the year.

AccorInvest is selling the hotels, 17 of which it owns and operates under the ibis or ibis Budget brand, while another six hotels it holds the lease to.

The hotels are spread across Victoria, New South Wales, Queensland, Perth and Canberra, and some estimates put the portfolio’s likely price tag at around $300 million.

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Among the assets are the ibis Melbourne, the ibis Sydney Airport, the ibis Budget Sydney Olympic Park and the ibis Budget Newcastle, with the 17 freeholds comprising almost 1800 rooms.

The six lease interests include the COMO Mgallery by Sofitel in Melbourne and the Novotel and Mercure hotels in Brisbane.

All hotels within the portfolio are operated by AccorHotels under hotel management agreements.

JLL’s CEO Australasia, JLL Hotels and Hospitality Group, Craig Collins, who is marketing the portfolio with colleague Peter Harper, says it’s an exceptionally rare opportunity to become an instant major player in Australia’s hotel industry.

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

“Never before has an offering of this nature been presented to the open market in Australia,” Collins says.

“The pure scale of this portfolio and its diversity – in terms of location, market positioning and income profile – presents investors with an opportunity to immediately establish an unparalleled foothold in one of Asia Pacific’s most highly sought after hotel investment destinations.”

“Economy hotels are a highly proven and successful hotel model in the Australian market. Their typically low operating costs and high level of profitability make them very attractive investments.

Harper, JLL Hotels & Hospitality Group’s executive vice president, says the portfolio also presents significant scope for growth.

All of the real estate assets in the portfolio are well established in their respective markets and occupy a combined 54,500sqm of land (approximately). Furthermore, there is significant potential for both trading and capital value upside as, in addition to ibis Melbourne Hotel and Apartments and Ibis Sydney Airport in particular, a number of assets are positioned in key economic growth areas.”

“The sale offering comes at a time when the Australian hotel market is experiencing unprecedented investor interest and we expect that a wide range of groups will be drawn to the very attractive fundamentals of the individual hotels and portfolio as a whole.”

The portfolio is to be offered to the market via expressions of interest.