Australian Hotel Sector

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Accor planning elite hotel near Sydney Airport
THE AUSTRALIAN NOVEMBER 11, 2014 12:00AM

Aerial photographs of Sydney Airport with the Blue Mountains in the background. Picture: Kelly Rohan

Accor is about to sign a deal with Goodman Group to develop an ultra luxury hotel near Sydney Airport. Picture: Kelly Rohan Source: News Corp Australia
FRENCH hotel giant Accor is about to sign a deal with Goodman Group to develop an ultra luxury hotel near Sydney Airport.

The 229-room hotel, to be branded a Pullman, is expected to be developed on Goodman’s land holdings at 185 O’Riordan Street, Mascot, and comes as cosmetic surgeon Jerry Schwartz looks to sell his Holiday Inn hotel near Sydney Airport through JLL Hotels & Hospitality’s Mark Durran.

It is understood a buyer is in due diligence on Dr Schwartz’s property, which he is selling to fund the purchase of the much larger International Convention Centre Hotel at Darling Harbour being developed by Lend Lease.

Meanwhile near the airport, plans lodged with council show Goodman proposes a 13-level hotel as well as the construction of a nine-level commercial tower attached to the rear of the hotel. Parking for more than 200 cars is included. Offices, factories and warehouses on the site will be demolished. Accor and Goodman declined to comment on the site, though the industrial property group has been transforming its urban sites through gaining approvals.

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Gravanis eyes off $100m Sydney beach hotel
THE AUSTRALIAN NOVEMBER 12, 2014 12:00AM

Lisa Allen

Property & Tourism Reporter
Sydney
Simon McGrath; CEO of Accor, in Sydney today.
Accor’s Simon McGrath. “It makes sense for us to grow this brand in Melbourne.” Source: News Corp Australia

PUBLICAN Bill Gravanis of the Oscars Hotels group is in the running to fork out more than $100 million to buy the four-star Novotel Sydney Brighton Beach Hotel near Sydney Airport from private equity group Brookfield.

The deal to acquire the 296-room hotel is expected to settle next March and is likely to be the biggest to date for the Oscars Hotels group.

Controlled by Mario and Bill Gravanis, the Oscars Hotel Group has been amassing hotels for years, recently picking up the Novotel Wollongong Northbeach and associated South Coast assets.

In Sydney, Oscars owns a portfolio of properties including the Camperdown Hotel, Hotel Sweeneys and the Bankstown Hotel.

Mr Gravanis yesterday declined to comment on the looming acquisition of the Novotel Wollongong Northbeach from Canadian private equity giant Brookfield.

Brookfield acquired several hotels as part of its $410m takeover of Thakral Holdings in 2012. It recently sold the Sofitel Hotel at Broadbeach in Queensland for about $83m to a Chinese buyer.

But another of its assets, the Hilton on the Park in Melbourne, is still on the market with a price tag of about $160m. Brookfield has been active with this Melbourne hotel with US hotel giant Hilton losing the management contract to French hotelier Accor, which will rebrand the property under its Pullman banner.

Hilton had managed the hotel, which opened in 1974, for 40 years.

Accor Pacific chief operating officer Simon McGrath announced yesterday that the Hilton on the Park fronting 192 Wellington Parade, Melbourne would be rebranded the Pullman Melbourne from January 1.

“It makes sense for us to grow this brand in Melbourne where there is clear demand for quality internationally branded hotels aimed at the corporate and upscale leisure markets,” Mr McGrath said.

The 18-level 419-room Pullman Melbourne will be the second such branded property in the southern capital following the lead of the Pullman Melbourne Albert Park which was extensively refurbished last year.

Despite the loss to Accor, Hilton said yesterday that it would have a strong presence in Australia with 12 hotels. “We are fully committed to expanding further with Double Tree by Hilton Melbourne — Flinders Street opening on December 1,” Hilton said.

Brookfield acquired a string of hotels in 2012 when it spent more than $400m on the assets of Thakral.

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Regional hotels ‘struggling’
THE AUSTRALIAN NOVEMBER 13, 2014 12:00AM

Lisa Allen

Property & Tourism Reporter
Sydney
CAPITAL city hotels are doing good business but their regional counterparts are struggling as occupancies in rural areas are predicted to fall to 40 per cent in the next decade.

New research from the Tourism Accommodation Association showed regional NSW’s share of the state’s visitor nights fell to 45 per cent in 2012-2013.

Jerry Schwartz, Australia’s largest private hotelier with a $750 million portfolio of city and regional hotels that included the Crowne Plaza in Newcastle and the Fairmont in the Blue Mountains, said it was difficult to attract corporate business to the regions. “It’s the whole political thing about promoting regional tourism,” Dr Schwartz said.

“I have injected countless millions into regional hotels (and) the only support I have ever had was a $250,000 grant for a large convention centre I am building in the Hunter Valley.’’

Like other hoteliers, Dr Schwartz is calling on more government support not only in terms of money but in helping speed up planning approvals.

Dr Schwartz said he hoped the TAA forecasts of 40 per cent regional occupancies within a decade were wrong. “My aim is obviously to provide facilities to increase occupancies. I would see leisure tourism increasing in the Hunter Valley and Blue Mountains and corporates would see the facilities as an incentive for their corporate business.”

Nigel Greenaway, fund manager for Eureka Funds that has six regional and city hotels, had seen the effect of the demise in corporate hotel business. “It makes it difficult to see how, without government support to drive regional demand, the regions will recover sufficiently to be able to invest capital into those assets sufficient to meet the market’s expectations,” Mr Greenaway said.

The Tourism Accommodation Association said regional accommodation had been declining for several years due to the affordability of overseas destinations.

Meanwhile, cruise lines and passengers spent $3.2 billion on cruising last year, according to a survey by Business Research and Economic Advisors to be released today.

The ports of Sydney, Melbourne and Brisbane accounted for almost three-quarters of cruise passenger spending last year.

However, the port of Cairns attracted the highest international tourist spend — a daily average of $366 a passenger on shopping and shore tours last year.

Before they board the cruise ship, international visitors spent $756 a day on accommodation, shopping, dining and transport.

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Peninsula still looking for Sydney hotel site
THE AUSTRALIAN NOVEMBER 13, 2014 12:00AM

Lisa Allen

Property & Tourism Reporter
Sydney
PENINSULA HOTELS
Peter Borer, chief operating officer of Hong Kong’s Peninsula Hotel Group, says he is looking for the right location in Sydney. Picture: John Feder Source: News Corp Australia
HONG Kong’s Peninsula Hotel Group says Sydney is on its radar for the development of a five-star city hotel but two of the key properties on offer — Gold Fields House and the government’s sandstone-clad heritage buildings in Bridge Street — do not cut it.

Peter Borer, chief operating officer of the Hong Kong and Shanghai Hotels Limited group, which operates Peninsula Hotels around the world, said he would not proceed with Gold Fields House, despite strong assertions from hospitality executives the group was initially interested.

“As I mentioned we are looking (in Sydney), but as I mentioned we are not part of that (Gold Fields House) tender,” Mr Borer said yesterday. “We are always interested in further expansion.”

Mr Borer would not reveal why Gold Fields House was off the drawing board, but was candid on why the hotel chain was not considering redeveloping the sandstone-clad Education and Lands Department buildings.

“We would not look at them because they don’t have a view,” he said. “The view in your city here is prime. Everybody wants to see the beautiful Opera House and (Sydney Harbour) Bridge. It’s like San Francisco and Hong Kong harbour — everybody wants to see the harbour.

“It would not be, in my opinion for us, a prudent investment to go into a situation where you don’t offer a view.”

In its first foray into Europe, the Hong Kong-listed company, which is majority controlled by the Kadoorie family, has just opened the Peninsula Paris, and has committed to opening the Peninsula London within six years and a Peninsula Yangon within four years. It is also embarking on renovations to its Beijing and ­Chicago hotels.

“We are very interested to move into India and maybe Istanbul and we are always looking at an opportunity in Sydney, but it has to be in the right location. Right now there is no iron in the fire,” Mr Borer said.

Unlike many other hotel companies, the Peninsula has a philosophy to manage and own its hotels. “We always want to own ... the business principle for the hotel company is to do these investments for a very long term,” Mr Borer said. He revealed that the company owns all its hotels except for the Los Angeles and Paris hotels, which are majority owned by the Qatari government, with Peninsula having 20 per cent stakes.

Mr Borer said he would continue to look at Sydney. “It is so hard to prioritise because sometimes an opportunity presents ­itself and then you have to grasp it. And sometimes it takes years. With the commitment of the ­Kadoorie family we are here for the very long term and hence we have no pressure to grow, and we can do it in a way that keeps up that commitment to quality and ­financial prudence so there is no rush.

“We get a lot of approaches from all over the world. We are also getting a lot of approaches in terms of going into more resort-type priorities, which we always decline because we believe our strength is going into five-star city hotels.”

But it is clear the Australian market would like a Peninsula Sydney given Aussie travellers account for 4-6 per cent of the company’s international business.

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Chinese rank Australia 17th

Jamie Freed
525 words
14 Nov 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Australia ranks just 17th on the list of the most popular destinations for ­Chinese travellers, despite its push to attract the lucrative tourists, according to TripAdvisor.

Data based on page views recorded on Daodao.com, TripAdvisor's official website in China, between September last year and September this year, found Australia ranked behind several non-Asian long-haul destinations including the United States, France, Italy, the United Kingdom, Spain, the United Arab Emirates and Germany.

The most popular destination searched was Hong Kong, followed by the United States.

This week, the US and China signed a reciprocal deal that will allow tourists from both countries to obtain 10-year visas, up from one year now. Chinese travellers to Australia can obtain a visa for up to one year.

The Tourism and Transport Forum said the shorter visa is causing Australia to lose market share of outbound Chinese tourists against rivals such as the United States.

Tourism Australia managing director John O'Sullivan said the true measure of Australia's popularity among the Chinese was not website visits or internet searches but the record number of visitors, which was expected to grow to more than 1 million a year by the end of the decade.

"We know from comprehensive research we've carried out in China that Australia is number one on their long-haul travel wish list, offering the perfect combination of unsurpassed natural beauty and unique wildlife as well as modern, contemporary cities offering great dining, shopping and entertainment," he said.

However, the US attracted 1.8 million Chinese visitors last year, more than double the nearly 790,000 Australia has attracted in the past 12 months. And while the percentage growth to Australia was 10.5 per cent, that is behind 23 per cent reported by the US from its larger starting base.

For Chinese travellers interested in Australia, Sydney and Melbourne ranked as the most popular destinations in terms of page views. But ­TripAdvisor said Queensland spots including Airlie Beach, the Gold Coast and Cairns were increasingly popular. More than half of those looking for hotel accommodation were searching for hotels with four stars and above.Strategy needed

Lily Cheng, the Asia-Pacific ­president of TripAdvisor, said consumer behaviour was evolving fast among Chinese travellers, with mobile technology and the desire for independent travel. "For Australian businesses ­hoping to attract Chinese travellers, a strong, tailored strategy will help them to be aligned with this audience's evolving expectations," she said.

"Those businesses that are willing to adapt and be proactive in fulfilling their needs will stand a greater chance at winning their loyalty."

In terms of the most popular Australian attractions viewed by Chinese visitors to Daodao.com, the preferences were grouped into four types: those seeking culture; the great outdoors; shopping and entertainment; and family-friendly activities.

Tourism Australia is trying to lure more free and independent travellers from the Chinese market, who tend to spend more than those on ­package tours.

Last year, Chinese travellers spent $5.3 billion in Australia. That is expected to rise to more than $13 billion by 2020.


Fairfax Media Management Pty Limited

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Singapore dives into Darwin

Mercedes Ruehl
354 words
13 Nov 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Denwol Group has sold the Rydges ­Darwin Airport Hotel and Resort to a fund controlled by Singapore's SC Capital for a price in the mid $80 million range, giving the offshore group a strong foothold in the Australian hotel market.

The private equity firm is believed to have acquired the two properties for its Real Estate Capital Asia Partners (RECAP) IV fund.

It was reported in September by Asian media that the fund was halfway towards raising $750 million in equity.

The Australian Financial Review flagged that the hotel would catch the eye of international investors when it was put on the market in June.

Darwin benefits from proximity to Asia and a host of significant infra­structure and development projects, including the $34 billion INPEX-operated Ichthys LNG development.

The sale reflected a yield in the 9 per cent range, industry sources said. The complex comprises 317 rooms, with approval to boost the size of the hotel to 328 rooms.

Wayne Bunz and Rob Cross of CBRE Hotels, who brokered the deal on behalf of the vendor, declined to comment.

Denwol and SC Capital did not return requests for comment.

Darwin was the strongest-performing hotel market in 2012 by revenue per available room, while in 2013 it recorded the fastest room-rate growth in the nation.More hotels selling The Darwin Airport Hotel and Resort was operated by Rydges at the time the assets were put up for sale and the ­selling agents said vacant possession was available.

There have been a significant number of Australian hotels changing hands to investors from Asia over the last 18 months and there are more set to sell in the coming months.

The Sheraton Noosa Resort and Spa has investors ­circling, with bids understood to be around $120 million. The campaign is being handled by McVay.

Queensland's Day­dream Island, being marketed by CBRE Hotels, is understood to have caught the eye of a buyer for more than $30 million.

Buyers are also circling Jerry Schwartz's Holiday Inn at Sydney Airport through a JLL campaign.


Fairfax Media Management Pty Limited

Document AFNR000020141112eabd00023

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Noosa battle hots up

Mercedes Ruehl
407 words
11 Nov 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

The Sheraton Noosa Resort and Spa has received record bids of more than $120 million, with the competition on to buy the iconic Queensland coastal town asset.

The Karedis family, which has invested in a number of commercial properties, is tipped as a front-runner, say sources close to the transaction.

No deal has been struck yet and a host of other strong domestic and offshore groups are understood to still be in the running for the hotel.

Noosa is the second home of many millionaires and wealthy business elite and has been dubbed a playground for the rich and famous. The 176-room Sheraton Noosa is owned by Valad Property Group, which is controlled by Blackstone.

If investment companies associated with Theo and Greg Karedis do ultimately acquire the hotel it would be one of the first big purchases of a hotel by a domestic buyer in some time. Theo Karedis, who came in at number 92 on the BRW Rich 200 list for 2014, has bought hotels in partnership with Arthur Laundy before. The pair bought the Manly Pacific Hotel back in 2003. The family invests through Karedis Investment Group and Arkadia Property Services, which is headed by Greg Karedis.

Valad could not be reached for comment and the Karedis Investment Group was uncontactable. The campaign is being run exclusively by McVay Real Estate, who also declined to comment. McVay is also handling the sale of the Gold Coast Sheraton Mirage with Knight Frank.

Leased to Starwood Hotels and Resorts, The Sheraton Noosa has been reported as having redevelopment and value add opportunities.

The sale would market yet another transaction in a record year for Australia's hotel market.

Many big ticket and iconic hotels have traded hands this year, primarily to offshore investors.

China's Sunshine Insurance Group is in the final stages of securing the Sheraton on the Park in Sydney for about $465 million.Earlier this year the Sofitel Wentworth went to the Singaporean Frasers property group, for $202.7 million.

Meanwhile The Australian Financial Review first revealed that Hilton Worldwide was putting its Sydney hotel on the market.

JLL has been appointed to sell the asset although it is understood the campaign will not officially start until 2015. Price expectations are for well over $450 million.

Key points Karedis family tipped as front-runners to buy landmark hotel. Interest from domestic and offshore investors.


Fairfax Media Management Pty Limited

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Chinese buy Hotel Cairns for up to $10m
THE AUSTRALIAN NOVEMBER 19, 2014 12:00AM

Lisa Allen

Property & Tourism Reporter
Sydney
Chinese buy Hotel Cairns
The Hotel Cairns has been bought by a Chinese family. Source: Supplied
A CHINESE family has paid up to $10 million for a hotel in Cairns in a bid to gain a foothold in the North Queensland city.

The 92-room four-star Hotel Cairns was sold by receivers Glenn Miller and John Goggin of BRI Ferrier after a CBRE campaign attracted 13 offers.

CBRE’s Wayne Bunz said the sale showed the strength of the city’s hotel market.

Meanwhile, Hong Kong billionaire Tony Fung has expressed interest in buying Cairns’ 321-room Pullman International hotel, which is jointly owned by Singapore’s Ascendas and local Sydney-based hotelier Robert Magid. Agents said the five-star property was worth $60m to $80m.

Mr Fung is attempting to take over Cairns Reef Casino as part of his plans for the $8bn Aquis project at Yorkey’s Knob.

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Hilton said to be seeking to sell Sydney hotel
20 Nov5:50 AM
Hong Kong

HILTON Worldwide Holdings Inc, the hotel operator controlled by Blackstone Group LP, is seeking at least A$400 million (S$450.2 million) from the sale of a Sydney hotel, people with knowledge of the matter said.

The hotel chain appointed Jones Lang LaSalle Inc to find a buyer for the Hilton Sydney Hotel, said the people, who asked not to be named as the process is private. It plans to complete the sale as early as in mid-2015, one of the people said.

Hilton, the world's largest publicly traded hotel operator, and competitors such as InterContinental Hotels Group Plc have been reducing property holdings. In October, Hilton announced the sale of its landmark Waldorf Astoria hotel in Manhattan to China's Anbang Insurance Group Co for US$1.95 billion, the most expensive US hotel transaction ever, according to research firm Lodging Econometrics. The five-star Sydney hotel is located on George Street in the city's central business district and has 579 rooms, according to its website. Hilton plans to keep managing the hotel after the sale of the property, the people said.

"It is business as usual at Hilton Sydney," Katrina Jones, a London-based spokeswoman for Hilton Worldwide, said in response to questions. She declined to comment on the property sale. Madeleine Little, a spokeswoman for Jones Lang LaSalle, declined to comment.

InterContinental is seeking at least US$1 billion from the sale of its hotel in Hong Kong's Tsim Sha Tsui shopping district, people with knowledge of the matter said this month. BLOOMBERG

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China’s Sunshine Insurance Group buys Sheraon on the Park for $463m
THE AUSTRALIAN NOVEMBER 22, 2014 12:00AM

Lisa Allen

Property & Tourism Reporter
Sydney
Sunshine swoops on Sheraton

Sheraton on the Park, Sydney, is now in Chinese hands. Source: Supplied
BEIJING-based insurer Sunshine Insurance Group has paid a record $463 million to buy Sydney’s Sheraton on the Park hotel in its first real estate ­acquisition in Australia.

The 557-room hotel fronting Hyde Park attracted suitors from Singapore, Malaysia, the Middle East and mainland China, said selling agent Craig Collins chief executive officer of Jones Lang LaSalle Hotels, Australasia.

The sale is a key marker for Chinese investment in Australia as it represents the first large acquisition of a commercial property by an insurance group after rules for offshore investing were relaxed.

Speaking from Shanghai last night, Mr Collins said there had also been some local interest in the five-star hotel, which was sold by US hotel giant Starwood with a long-term management agreement in place. Starwood has amassed $US1.5 billion over the past three years from the sale of its hotels, including the Sheraton on the Park.

“We are pleased to advance our asset-light strategy with the sale of the iconic Sheraton on the Park hotel and look forward to working closely with SIG to ensure its continued success,” said Simon ­Turner, president of global development for Starwood.

“The terms of this sale underscore the strength of the Sheraton brand and the success of this hotel, as well as the tremendous value of this property in a high-barrier-to-entry market.”

Starwood Pacific director of acquisitions Andrew Taylor said SIG had committed to a $40m renovation of the hotel.

“This will see the Sheraton on the Park’s position as a leading hotel in Sydney maintained for the long term future,” Mr Taylor said. “This takes the price per key up significantly with the additional renovation costs.”

Sunshine added that the Sheraton on the Park would help diversify the group’s holdings by “giving us a trophy asset in Sydney”.

It is understood that under the terms of the sale, Starwood required the purchaser to sign a management agreement of up to 50 years. The hotel was developed in the 1990s by Andrew Richardson after he acquired sites between Elizabeth and Castlereagh Streets.

Meanwhile, Starwood continues to expand its management agreements, operating 14 hotels here including Four Points by Sheraton Brisbane and Sheraton Melbourne. In the next few years it will open Aloft Perth Rivervale, The Westin Perth and W Brisbane.