Australia Retail Real Estate Market Future Outlook And Projections
Retail sector across the states of Australia are projected to increase over the next five years (2019-2023) at a CAGR of over ~%. The market is focused on reducing exposure to low growth assets and redeploying capital into new acquisitions or re-development projects. The country witnessed a growth in vacancy rate in Australia from ~% in year 2017 to ~% in the year 2018 which excludes large format retail. Retail turnover growth is projected to be slightly below trend in 2019 as proactive shopping centre owners have built business plans on a lower retail spending environment which will create a diverse tenancy mix that appeals to the primary trade area which will be important to maintain occupancy and income levels.
How is the Australia Hotel Real Estate Market Positioned?
The hotel space within Australia real estate industry was witnessed to grow in terms of total room revenue. The hotel real estate industry of Australia showcased a five year CAGR of ~%. Major demand driver for the hotel real estate space was tourism which saw a record growth in terms of tourism arrivals in the year 2018. Australia’s accommodation pipeline had a positive growth in year 2018 with the opening of almost ~ new rooms across the ten major markets and a further ~ rooms in Sydney and Melbourne’s sub-markets. With a strong economic backdrop and significant investments in tourism and transport infrastructure, demand is expected to absorb the additional supply as Australia’s appeal as a premium destination for visitors continues to grow.
What Are The Factors Inflecting Hotel Real Estate Sector In Australia?
Increase in Number of International and National Tourists: In 2018, approximately ~ million tourists visited Australia from overseas thus, showcasing a growth of ~% from the year 2017, when ~ million tourists visited Australia from the other countries. In 2019, this figure is projected to grow to over ~ million overseas visitors.
Emergence of Lifestyle Hotel Segment: The emerging hotel category refers to accommodation properties that have a unique design and that offer their guests experiences that connect them with the local area. Australia’s boutique and lifestyle hotel market has expanded in the period from 2013 to 2018 with the opening and repositioning properties and the entry of new lifestyle and soft hotel brands.
Government Initiatives towards Tourism in Australia: Tourism ministers from the Australian and state and territory governments had started to imply four policies under priority for the tourism sector. The four policies related to the tourism in Australia focused on the national strategy to grow the hotel and tourism industry.
Other Factors:
Increase in tourist expenditure;
Presence of branded hotel operators; and Tourism contribution to GDP.
Current and Future Hotel Demand and Supply
The increased demand for rooms, the rapid growth of domestic and international visitors, and the historically lower levels of new supply have majorly contributed for the gap between the demand and supply of new hotel rooms in Australia.
New hotel developments require multiple number of planning regulations, which affect the cost and timeframe of projects. Regulatory frameworks thus had the potential to hinder timely and innovative hotel projects as they imposed outlandish business limitations on investors in the major cities and capitals of Australia.
The challenges involved in developing tourism attractions and accommodation facilities play a key role in contributing to an undersupply of hotel capacity in Australia.
A scarcity of land in capital cities and competition from other land uses with better business cases has contributed to high occupancy rates for hotels, underinvestment in existing stock and substantial turn-away demand during peak periods. Regional tourism attractions are often located in areas of natural amenity which typically face a higher regulatory burden, potentially lowering investor interest.
Regional Landscape Of Australian Hotel Real Estate Market
New South Wales (Sydney): A strong performance of Sydney’s hotel sector was experienced in year 2018 with RevPAR increasing ~% from 2017. Major factor for positive growth in Sydney was the strong economic backdrop and significant investments in infrastructure. The opening of the new International Convention Centre in late 2016 had also provided growth to the Australian hotel sector. Sydney hotel market added around ~ rooms in the CBD in the year 2018 and ~ new rooms in the metropolitan sub markets. Occupancy levels averaged ~%in the year 2018.
Victoria (Melbourne): Melbourne acted as one of the active hotel investment markets in year 2018 with 4 major hotel transactions including the Mercure Melbourne Treasury Gardens for AUD ~ million, Adina Melbourne for AUD ~ million, The Royce Hotel for AUD ~ million and the Sheraton Melbourne for AUD ~ million which was bought by an offshore group i.e. Qatar Air.
Queensland (Brisbane and Gold Coast): Brisbane was one of the most active markets in terms of hotel transactions in year 2018 with buyers strategically acquiring assets for repositioning across the CBD as trading performance was nearing stabilization.
Australia Hotel Real Estate Market Future Outlook And Projections
Sydney and Melbourne showcased a growth in the year 2018. It is expected that the construction wave will witness more than ~ new rooms added in Australia by 2025. In Perth, the property market timeline is ahead of the rest of Australia. As the residential markets close down, hotels will provide good cash flow to investors, attracting international and local investors to the market. There is a trend in Australian hotel real estate sector of designer touches, smart technology solutions and engaged, personal service.
There are a total of ~ rooms in the pipeline until 2028, from a total of ~ projects. Capital city accommodation will showcase high occupancies for the year ending March 2019. Hobart, Sydney, Melbourne and Adelaide will showcase strong results of over ~% of occupancy. This demand will significantly improve the hotel sector’s Revenue per Available Room (RevPAR) in coming years and is expected to continue to rise, projecting growth of ~% in 2019. It is expected that 2019 will remain positive for the Australian hotel sector as the room nights sold to grow over the next three years at ~% per annum, and national occupancy rates to rise ~% by 2019. Revenue per available room is forecasted to grow by ~% over the next three years till 2023, and average room rates are expected to increase at an average of ~% by the year 2023.
Key Segments Covered:-
Australia Retail Real Estate Market
By Type:
Regional
Sub-Regional
Neighborhood
CBD
Large Format Retail
Others (Small Retail Stores and Independent Stores)
By Geography:
New South Wales
Victoria
Queensland
Western Australia
South Australia
Northern Australia
Tasmania
Australian Capital Region
Australia Hotel Real Estate Market
By Type:
3 Star Hotels
4 Star Hotels
5 Star Hotels
Others (Less than 3 Star Hotels)
By Geography:
New South Wales
Victoria
Queensland
Western Australia
South Australia
Northern Australia
Tasmania
Australian Capital Region
Australia Office Real Estate Market
By Type:
Grade A Office
Grade B Office
Premium Office
By Geography:
New South Wales
Victoria
Queensland
Western Australia
South Australia
Northern Australia
Tasmania
Australian Capital Region
Australia Residential Real Estate Market
By Type:
Apartments
Villas
By Geography:
New South Wales
Victoria
Queensland
Western Australia
South Australia
Northern Australia
Tasmania
Australian Capital Region
Key Target Audience:-
Real Estate Developers
Independent Investors
Real Estate Consulting Companies
Third Party Real Estate Companies
Independent Architects
Government Associations and Agencies
Time Period Captured in the Report:-
Historical Period – 2013-2018
Forecast Period – 2019-2023
Companies Covered:-
Metricon Homes Pty Ltd
Dyldam Developments pty limited
Burbank Group
GJ Gardner Homes
Multiplex Group
ABN Group
MJH Group
Stockland Corporation Limited
Frasers Property Australia Pty Ltd
Henley Properties, Australia
Lendlease group, Australia
Probuild Constructions (Australia) Pty Ltd
CPB Contractors
John Holland, Australia
Key Topics Covered in the Report:-
Australia Real Estate Market
Australia Real Estate Market Revenue
Australia Residential Villas Real Estate Market
Australia Grade A Office Real Estate Market
Perth Real Estate Market
South Australia Real Estate Market
Victoria Retail Real Estate Market
Total Number of Households Australia
Number of Migrants in Australia
Australia Residential Real Estate Market
Australia CBD Real Estate Market
Australia Real Estate Industry
Sydney Real Estate Market Size
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