Sales in hotel sector continue to rise

Sales in hotel sector continue to riseThe hotel sector continues growing with sales worth $2.2 billion in the past 12 months to March 2014 on the back of an appetite for assets from foreign investors.This is up 5 per cent on $2.1 billion to the 12 months to March 2013 and up on the five-year average of $1.4 billion.A report by Savills notes that the majority of interest in hotel assets is originating from overseas investors looking to acquire hotels on completion or enter into a joint venture with a local developer.It reports that foreign capital accounted for 45 of the 79 transactions recorded and purchased 80 per cent of the stock by value for a combined $1.8 billion.The report also notes that average year-to-date RevPAR has increased by 5.6 per cent to April 2014 and that average occupancy in April 2014 was 75.4 per cent compared with 73.4 per cent 12 months earlier.Strong prices and high activity were also fostered by an acute lack of supply of quality hotels in the market. This has made hotel conversions very attractive in markets like Sydney.Recent major office conversions include two Sydney properties at 34 Hunter Street and the Sydney Waterboard site at 115 Bathurst Street. In Brisbane, 80 Albert Street is currently being converted into a hotel by Frasers.Savills expects the total for hotel sales to hit $1.5 billion for the 2014 calendar year. The Savills report can be found here