JLL Reports Sydney's CBD and Metropolitan Hotel Markets Experienced Record Year
February 15, 2016 12:37pm
February 15, 2016 - Sydney's CBD and metropolitan hotel markets finished 2015 on a high with full year STR data reporting exceptional occupancies and average daily rate (ADR) levels across the board.
Conducive to the respective markets' strong performance remains relatively benign supply pipelines, increases in major demand generators, growing airline capacity, and continued international and domestic visitation growth driven by the depreciation of the Australian dollar.
In Sydney city, hotel occupancy increased marginally on existing highs to 88.2% for the full year, while ADR increased by 6.6% to $243. The five-star market followed similar growth trends with occupancy at 88.6% and ADR now nearing $300.
Craig Collins, Chief Executive Officer - Australasia, JLL Hotels & Hospitality Group, said, "Sydney hotels are having a golden run and this should absolutely continue. Hotels in Sydney are trading exceptionally well and Sydney is one of the most sought after tourism investment markets across Asia Pacific."
Mr Collins continued, "Many global hotel buyers want a Sydney hotel in their portfolio. The fundamentals are strong and the future is bright. Hotel investors love Sydney's new infrastructure, the limited hotel supply, the cranes on the skyline and the positive feel of the city. When global hotel investor's talk about where they wish to invest, Sydney now sits alongside London, Paris and New York, it truly has become a global city."
Sydney's metropolitan markets also performed exceptionally well in their own right with Ryde, the Airport Precinct and Parramatta all recording strong RevPAR gains.
A function of reduced supply, Ryde had the largest ADR gain out of the three markets at 13.5% to finish the year at $171 with an occupancy of 78.5%. The Parramatta market recorded a 5% increase in ADR to $170 as it benefitted from a strong and stable occupancy base of around 83%. The Airport Precinct, albeit with a modest increase in ADR of all the Sydney markets at 4.3% ($159), achieved one of the highest occupancy rates in the country of 87.8%, recognition of the fact that this market not only draws on demand from the airport, but also the significant economic activity within the surrounding commercial, residential, industrial and logistics hubs.
Peter Harper, Senior Vice President, JLL Hotels & Hospitality Group, said, "The substantial growth seen over 2015 in Sydney's metropolitan markets, whilst contributed to by CBD overflow, is a product of increasing demand for quality hotel accommodation in these areas."
Mr Harper continued, "We expect to see continued growth in these markets with further densification and investment acting as a catalyst for sustained demand into the future."
The hotel trading outlook for 2016 is positive with these markets expected to continue to benefit from the current demand versus supply equation with any new hotels coming online likely to be absorbed by pent up and growing demand.
From an investment perspective, sales activity across the various markets is anticipated to be constrained throughout 2016 following several years of heightened deal volumes.
"Investor demand remains at an all-time high yet the level of available stock is probably at a decade low at the moment. There's no doubt that investment market conditions remain in favour of hotel owners." concluded Mr Collins.
Source: STR Global, JLL
Tags: str global,
jll’s hotels & hospitality group
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 230 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $56.4 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.
JLL has over 50 years of experience in Asia Pacific, with over 32,000 employees operating in 83 offices in 16 countries across the region. The firm was named ‘Best International Property Consultancy’ and ‘Best Property Consultancy Asia Pacific’ at the International Property Awards Final 2015 as well as number one real estate advisor in Asia at the 2015 Euromoney Real Estate Awards.
Contact: Craig Collins, CEO - Australasia, Hotels & Hospitality Group
+61 2 9220 8515
Contact: Peter Harper, Senior Vice President - Investment Sales
+61 2 9220 8548
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