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Accommodation Market Activity ( 20/01/2004 )
The latest quarter has certainly been a busy one with a large number
of motels and holiday unit complexes changing hands. We saw a very
busy time for buyers and sellers throughout October up to Christmas,
with many trying to tie up loose ends before the Christmas/New Year
period.
The first half of January has been no different with the start of the
year off to a flying start. A large amount of enquiry has been
received since the new year commenced which is a good sign for anyone
selling their accommodation business.
Possible interest rate rises are expected around February and March,
hopefully not enough to deter potential buyers from entering the
market, as previous rises have not been a deterrant so far.
Enquiry levels are still dominated by buyers from the southern states,
particularly Victoria and New South Wales. The start of the new year
has prompted much interest from the south, and the time for a change
of lifestyle seems to be the main motivational factor.
Leasehold Motel Market
Having played second fiddle to freehold motels in the second half of
2003, demand has come on strong in December and January with a large
number of enquiries for leasehold motels.
Price levels from $150,000 to $1.5 Million are being sought after,
with strong enquiry at all price ranges. Leases that had been
available with little interest shown in them before December, now are
under contract or being inspected by potential buyers.
Freehold Motel Market
This market has continued to strengthen since mid 2003. There was a
very high increase in demand for smaller freeholds, and this has now
spread to the larger motel market. There has been excellent activity
with many sales being successfully negotiated on freehold motels in
the past 6 months by QTHB. Price ranges from $500,000 to $4.5 Million
have been achieved with high levels of demand for properties in the
higher price brackets.
Investment Motel Market
Demand keeps growing and growing for motels that are leased. Supply
cannot keep up with demand at present, which has been the case for
some time. Long leases with 10% - 11% net returns are proving to be
most popular with investors. Good tenants, long leases with good net
returns are the investment properties much sought after.
Management Rights Market
Demand has increased for Management Rights, and doesn't show any signs
of subsiding. Lifestyle for operators is proving to be the motivation
for many, particularly those from southern states. All areas are
experiencing good demand from Port Douglas to Tweed Heads,
particularly from buyers from southern states. Some larger complexes
with price ranges over $1 Mil have been moving.
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