Hotel development pipeline in good health

Hotel development pipeline in good healthJLL’s Australian and New Zealand Hotel Development Register suggests the hotel development pipeline in Australia is strong, while development activity in New Zealand is on the upturn.The Hotel Development Register, which tracks accommodation projects as they are mooted, proposed, under construction, completed or taken out of the market, shows there are currently 7588 rooms in the development pipeline (under construction and proposed) in Australia. This represents the highest level for more than a decade.New hotel openings have gained pace in the major accommodation markets in Australia in the past year. The register identifies 18 new accommodation establishments offering a total of 1631 rooms. This represents an increase of 1.8 per cent on the existing base stock, with activity concentrated in Melbourne (786 rooms), Canberra (252 rooms), Brisbane (2 rooms) and Darwin (186 rooms).Rooms under construction in Australia have increased 13.3 per cent (413 rooms), with construction activity most prevalent in Sydney (1008 rooms), Brisbane (765 rooms) and Adelaide (614 rooms).While the accommodation development pipeline remains above the long-term average, the register indicates that the pipeline has moderated over the past year, with only 26 projects likely to advance in the near term. It says high occupancy levels and capacity constraints will continue to characterise the Australian hotel investment landscape for the next few years.The register shows the number of proposed rooms has reduced by 4.2 per cent (-179 rooms) to 4064 rooms. Proposed projects are greatest in Perth and Brisbane, with a number of projects having been shelved for an extended period of time.In New Zealand, there are currently seven hotel projects under construction, comprising 836 rooms. This is up 5.4 per cent on existing room supply. The register shows there are a further 21 proposed/mooted accommodation projects in the country’s main centres, comprising 2632 rooms, although not all are expected to advance.New Zealand’s biggest city, Auckland, remains the focus of development activity (1091 rooms), as well as reconstruction projects in Christchurch (1180 rooms). Both markets combined account for 66 per cent of rooms in the pipeline.