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July 5, 1999 - Australia's motel, hotel and pub markets
are currently experiencing a strong resurgence as increased returns
are generating unprecedented buyer demand and escalating property values.
Nowhere is this more evident than in the Pub market which has reached record levels over the past two years, largely due to the enormous profits generated from poker machines and gaming facilities. In response to market demand, Jones Lang LaSalle Hotels has established a dedicated national motel and pub brokerage division under the TransAct brand. TransAct will be run by Mr Rob Cross, an Australian, formerly Director of Jones Lang LaSalle Hotels New Zealand, with state managers being Mr Phil Zoiti in Perth, Mr Scott Callow in Brisbane and Mr Stephen Mansfield in Melbourne. According to Mr Cross the sale of pubs and motels is the traditional "grass roots" business of the hotel property market in Australia. Mr Cross said, "During the first six months of 1999, we have sold $17.8 million worth of motels and pubs and over 200 properties since 1995. Opportunities for investment are vast in consideration that there are *2,386 motels and 4,800 pubs, taverns and bars across Australia. There is also limited new supply in the market with growth measuring *2.4% pa. for motels and 3.2% pa. for pubs, taverns and bars since June 1995." He explained, "TransAct has moved away from the top-tier hotel market in order to concentrate on the highly lucrative sector of motel, hotel and pub sales." *Profits before tax for pubs, taverns and bars with gambling facilities for 1997-98 was $586 million, representing a profit margin of 8.9%, compared with 3.9% in 1994-95. At the end of June 1998 there were 2,888 businesses with gaming facilities, representing a 24% increase since June 1995. *These businesses operated 3,257 licensed premises, of which 80% had poker machines and 50% had TAB facilities. Since 1995, there has been a staggering 130% increase in gambling income, from $576 million in 1994-95 to $1,326 million in 1997-98, representing 20% of the total income for hotel owners. Earlier this year JLW TransAct (via its parent Jones Lang Wootton) merged with LaSalle Partners, leading to the formation of Jones Lang LaSalle Hotels, the world's first global hotel real-estate investment banking group. TransAct has been established to operate as a separate business, servicing the motel/pub property market nationwide, whilst Jones Lang LaSalle Hotels will continue to serve clients requiring advice on larger international hotels globally. *Source from Australian Bureau of Statistics and Jones Lang LaSalle Hotels |
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Also See: | Sydney's Hotel Industry Prepares for the 2000 Olympic Games / Arthur Andersen / Summer, 1999 |