What a Year That Was

Year 2011 has been a rollercoaster ride within the motel sales market.

At certain times the market has been running hot with record levels of enquiries on individual motels, however for the majority of the year enquiry levels have been relatively low.

Particular areas around Queensland have been attracting much more interest than others from motel investors, owners and operators. Locations such as Charleville, Roma, Kingaroy and Chinchilla have been showing strong demand from buying groups. The high level of accommodation requirements from companies and businesses involved in the LNG industry has created a buzz from buying perspectives in and around the southwest Queensland areas.

Gladstone, Rockhampton and Mackay have seen a crossover with strong demand for accommodation from LNG projects in the southern central Queensland area and the coal industry in and around the Bowen Basin has been very active with Mackay experiencing very high occupancy rates from those working within the coal industry requiring accommodation. There has been a major shortage in Gladstone for any form of accommodation for much of the year. Surrounding areas such as Rockhampton and Biloela have also seen flow over from Gladstone’s tight accommodation market. This has the effect of creating buying interest from those wanting to invest in these areas particularly in the accommodation industry.

The recent sale of a motel in central Queensland resulted in a huge level of interest from the wider market. Interest came from husband and wife owner operators, motel investors and companies wanting to enter the accommodation industry with many already in the motel industry looking to acquire another motel property. The largest amount of interest was still from the family owned and operated motelier. The level of interest in this particular motel that sold mid-year was as high as we have ever experienced and confirmed that good quality motel properties even in a quiet market do attract a lot of interest. The property owner was extremely happy with the sale price achieved and the high demand that the specific marketing campaign created.

In some areas of Queensland the volume of motels available on the market has fallen well short of the demand. In a number of sales we have settled recently there have been many unsatisfied buyers that were unsuccessful in their attempt to purchase a particular motel. This has been very positive for other motel owners in those regions who are looking for guidance on the value of their motel business/property.

Unfortunately some other areas throughout Queensland have struggled with their occupancy and room rates, and therefore with interest being generated from the buying market. Areas reliant on tourism to a large extent have suffered from unseasonal bad weather early in the year and the high Australian dollar. There has been a stark contrast in the occupancy rates and nightly room rates achieved between accommodation businesses in mining related areas compared to tourism related. The market is seeing buying opportunities in some of the tourism focused areas and is convinced the market will bounce back. The question they have that is holding them back from making decisions is “not whether it will bounce back but how long will it take before it bounces back”.

The stop and start market we have endured during 2011 has required us at times to buckle up for heavy traffic whereas at other times we have slowed to almost a complete stop. Indications leading up to the end of the year confirm our belief that 2012 will bring a stronger level of interest back into the market from early on in the year, and this can hopefully be maintained on a more consistent basis throughout the entire year.

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