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Daily Archives: 24 Sep 2009

Land of buying opportunity Down Under?

Posted on 24 Sep 2009 | Comments Off

While Australian hotels may have been slow to transact in recent times, a pick-up in activity is expected in the coming months

SOUTH-EAST Asian investors are starting to scour Australia’s hotel market in the hopes of finding similar value to the hotel investments they made in the mid-1990s. It can be said that Asian investors were net real estate buyers between 1994 and 2003 before turning into net sellers between 2003 and 2006. That sell period was correlated to an improvement in hotel performances, lifting asset values, together with an appreciation of the Australian currency. This resulted in investors realising handsome capital gains when repatriating the funds back to their homeland.

Fast forward to September 2009 and a repeat cyclical trend may possibly be emerging. Indeed, as identified in the table above, all of the major hotel transactions that took place over the last 12 months are attributable to South-east Asian investors including Singapore’s Hotel Grand Central, Thailand’s TCC Land and Malaysia’s TA Enterprises Berhad. Notwithstanding the sale of the Westin Melbourne, hotels have transacted between A$190,000 and A$320,000 (S$234,717 and S$395,313) per room. Based on anecdotal evidence, this would appear to represent an, at times, steep discount by reference to full replacement value (after factoring land cost).

Cushman & Wakefield is aware of a number of hotel properties available to investors, both on and off-market, at the ‘right’ price. While Australian hotels may have been slow to transact in recent times, a pick-up in activity is expected in the coming months. But let us first ask the obvious questions – why hospitality and why Australia? Continue reading →

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Posted in Overseas Property

Tagged Australia Hotel Investment, Australia Property, Hotels

Main St rents feeling the blues

Posted on 24 Sep 2009 | Comments Off

But slowdown shows signs of abating in Asia-Pacific

MORE than half the world’s most expensive shopping streets have seen prime retail rents slump in 2009 – marking the biggest fall in retail rents in 24 years – a recent report from real estate adviser Cushman & Wakefield showed. Some 54 per cent of the 274 main streets across 60 countries monitored by Cushman & Wakefield saw prime rents fall in 2009.

New York’s Fifth Avenue remained the world’s most expensive street, though prime rents dropped 8.1 per cent to US$1,700 per square foot per year, Cushman & Wakefield said. Fifth Avenue has been the world’s most expensive street for the last eight years. It was followed by Hong Kong’s Causeway Bay, which showed a 15.1 per cent fall in rents to US$1,525 per square foot per year, while rents in Paris’ Avenue des Champs Elysees were static at US$1,009.

Cushman & Wakefield’s global head of retail, John Strachan, said the past year was one of the most difficult for the sector, with consumer spending and retail sales down in many markets.

‘The good news, however, is that the worst is almost certainly now behind us,’ Mr Strachan said in a statement, adding the annual survey’s findings represented the biggest global fall in retail rents in its 24-year history. ‘There will undoubtedly be some markets which will continue to be affected over the next year but we expect to see a greater number move back into positive territory,’ he said. Continue reading →