Hotel transaction volumes in Australia to hover around US$1.5b in 2023

It’s a slight increase from the US$1.4b expected this year.

According to a JLL report, classic holiday destinations like Gold Coast and Cairns are leading Australia’s strong trading recovery, fuelled by strong domestic leisure demand. 

Capital city markets have also exceeded expectations this year and are recording exceptional average daily rate premiums compared to the same period in 2019, the report added. 

Here’s more from JLL:

Investor demand for Australia’s gateway remains strong, led by the blockbuster transaction of the Hilton Sydney selling for US$361 million in the country’s largest ever single asset hotel sale. 

The signs are promising. JLL predicts that full-year volumes could reach US$1.4 billion, if certain deals transact. 

Private equity buyers remain a dominant capital source in the market, as they look to deploy significant dry powder across a range of deals from upscale hotels to smaller metropolitan and regional assets. 

This comes as repositioning or redevelopment of older assets, particularly in Melbourne and Sydney, becomes a recurring theme. Recent transactions include Hotel Lindrum and the Sir Stamford Circular Quay, with both hotels being acquired for their value-add potential and set to be redeveloped into alternative uses. 

As Australia sees an uptick in investor appetite, transaction volumes in 2023 are likely to hover around the long-term average of approximately US$1.5 billion.