The $18.5 million sale of the Bounce Backpackers hotel continue the run of offshore investment dollars that have seen Australia rank second in the Asia-Pacific region for hotel transactions.
The five-star hotel is located opposite Sydney’s Central Station, with a tavern at street level and 190 beds, a kitchen and a rooftop terrace over five levels.
It was negotiated off-market by CBRE Hotel’s Andrew Jackson to a targeted list of investors in the sub-$25 million investment bracket, which Jackson notes is in high demand in light of a shortage of high-end CBD hotel assets and prospects in Australia. The buyer was a Chinese private investor.
“Australia’s hotel sector continues to fly high on the radar of Asian investors, with its relative proximity, economic stability and high growth returns, key fundamentals attracting buyers.
“We are seeing offshore investors move beyond the traditional areas of CBD-centric hotel markets, with a renewed interest on the regional and suburban market, which was once dominated by the domestic investment community.”
CBRE’s 2015 Asia Pacific Hotel MarketView report found strong appetite for hotel property across the country. Over $2.5 billion in transactions during the first half of 2015 elevated Australia to second-highest in the Asia-Pacific region, behind only Hong Kong.