Overseas investors, especially those from Singapore, have developed a healthy appetite for Australian hotels, the graph below prepared by Colliers International shows.
From 2003 through to 2007, domestic institutional investors were the main purchasers of hotel assets in Australia.
However, over the past five years, this trend has reversed, with Australian domestic institutions being the main vendors, and overseas investors dominating purchasing activity.
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Recent sales to offshore investors include the four-star Rendezvous Hotel on Flinders Street in the Melbourne CBD for $61 million to a Singaporean property group the Straits Trading Company. The group also owns two other Rendezvous-branded hotels located in Perth and leases and manages others in Melbourne, Sydney, Brisbane, Adelaide and Port Douglas.
The largest transaction of the quarter was the sale of the five-star Palazzo Versace hotel on the Gold Coast to mainland Chinese investors by the Sunland Group for $68.5 million. The sale is subject to approval by the Foreign Investment Review Board and the House of Versace, which still owns the brand name.
Local investor purchases includ the Sydney-based Barana Group, which bought the Novotel St Kilda in Melbourne for $55 million.
This article first appeared on Property Observer.