The tourism market and in particular management rights are on the move after considerable pent up demand.
Every year we continue to grow and we are starting to see management rights listings becoming in short supply in the coastal regions as is the case for motels and caravan parks. The old saying of the coast is for show and the country is for dolar is true in some respects, but also the balance of lifestyle is increasing in importance.
|By Michael Philpott
Director, Tourism Brokers
With the New Zealand dollar looking at parity with the Australian dollar shortly, historically low interest rates, increased demand from syndicates and the increased number of Chinese tourists/migrants, combined with the Australian purchasers after a lifestyle change, the accommodation market is starting to heat, even more so with management rights. To assist with communication, recently this company conducted a number of industry seminars, have enhanced our website to facilitate various languages for communication and reflect the nationalities with whom we deal. This is a benefit for any business going forward and a suggestion that I believe many should follow. Now is a good time to realise the opportunity with national coverage. Increased demand creates a better market for all. Recently we have seen sales in Merimbula, Port Macquarie, Forster, Sydney, Avoca, Batehaven, and Byron Bay just to name a few.
Australia is hot property, getting hotter and management rights are popular modern property option with a secure income that can be relied upon and are generally viewed favourable by banks. Sydney is really hot, Melbourne is fast following and the Gold Coast and Sunshine Coast are starting to benefit.
On the Gold Coast and Sunshine Coast, last year’s trading (some say the best in years) has been solid for most and the enthusiasm of the future has seen more buyers entering the market, creating an opportunity for those who wish to exit. Nationally we are seeing the multipliers increase as the demand increases, they are yet to reach the peaks of the past but certainly they are better now than what they have been in the last couple of years, especially on the coast. Buyers have a real opportunity to capitalise and add value going forward. Property values are also starting to move, once again in Queensland they still have some room to recover, in NSW and Victoria, we are seeing new records being set and that will flow north eventually, but the benefits will continue. Sydney offers strong employment a large population and management rights contribute a service.
If you are wanting to maximise your options you need to be the best prepared you can possibly be either as a purchaser to capitalise quickly on and recognise an opportunity or as a seller to put the best presentation forward. We not only have seminars but we also have booklets in hard and electronic formats that assist throughout the process and information on our website that will help you.
Nationally, for sellers if you are organised, have systems in place that are easily followed, current financials and a recent property valuation for the real estate, you are able to get a higher multiple than a comparable property that is disorganised and harder to manage. The more recent your figures the better your chances of capitalising upon the period and assisting the purchasers secure the finance from a funder. If you can identify the opportunities to value add, you have the ability to implement some changes, but can highlight the opportunity to compete against other complexes that can be incorporated in business plans.
This can add some serious value to some sales. The issue more and more, especially in NSW is becoming a shortage of stock in the $1 million to $3 million range. Nationally, nets below $100,000 are still hard but they are also moving and are slowly becoming in short supply again. Higher nets are seeing corporate demand increasing in the top end as well and it does not matter where the property is, corporates are chasing the returns.
Often we hear people say what if or had I only. When it comes to management rights or any accommodation business the vast majority of people optimise the value by doing one thing well, the basics. It is important to treat people in any transaction whether they be a prospective occupier or a purchaser with mutual respect and work with them for a win-win, either to maximise the return visits or make the daunting process of a sale a pleasant experience for all concerned. Some owners are tired, after a change, want to retire or go into a larger complex, regardless of the situation, the buyers are after the WIFM (what is in it for me) and now more than most recent times the optimism is on the increase.