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Motel & Resort Market Activity - June 2007 ( 19/07/2007 )
Current activity within the motel industry is very strong. There are
very few motels or resorts on the market and there is strong demand
from a small but genuine market base. There are numerous recent motel
sales that have been transacted with some very good prices being
achieved. Demand is outstripping supply with a shortage of motels
being actively marketed for sale, compared to the level of willing
buyers in the market. Now is therefore an excellent time to be
selling a motel as can be evidenced by the Sales Activity by Qld
Tourism & Hospitality Brokers listed below. Particular areas
throughout the state have performed more strongly than others, with
Mackay, Townsville and Rockhampton all recording excellent sale
values.
Leasehold motel sales are active particularly at the $700,000+ price
level. We have been receiving genuine enquiries for lease motels
above this price with the market being very active, and the lack of
lease motels available for sale has meant very good prices being
achieved for those that have sold recently.
Freehold motels are also in high demand with the highest number of
enquiries being in the price range of $2m - $6m. There have been very
few freehold motels available above $1.5m recently and again, ones
that have sold have achieved excellent prices. Well presented
freehold motels with trading data that is up to date are selling
quickly. All regional areas have been in demand with buyers, from
coastal motels to remotely located properties.
The Freehold Investment Motel market continues to roll on. There are
large numbers of buyers in the market for motels with a lease in
place. There are however, very few available on the market. This has
therefore placed pressure on capitalisation rates over the past few
years, having gone from as high as 12% in 2000 to now sales being
achieved at 9% and less for high quality motels. Motels were once
attractive investments to those from within the industry, however
investors from traditionally other investment areas now see the
attractive opportunities a motel investment can offer. This has
resulted in stronger demand and on the back of shorter supply has
resulted in lower returns.
Activity in the Management Rights sector throughout regional
Queensland has not been as busy as the Motel market however there are
some positive signs. Enquiry levels have not been as high as recent
times and therefore the number of sales registered has been down on
expectations, however the low number of complexes available for sale
has largely contributed to the lower level of sales.
In summary, the motel sales market is very active at present and good
prices are being achieved in a relatively short time. Well presented
motels with all financial figures up to date are receiving good
enquiry levels and therefore good sale prices.
For further details please contact Andrew Morgan on 07 4953 1611 or
0417 608 041.
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