NSW market is key to Veriu Group growth
Veriu Group continues to roll out its successful apartment hotel accommodation model across NSW under both its Punthill and Veriu brands
It’s been a busy first half of the year for Veriu Group, with no respite in sight, as it continues to roll out its successful apartment hotel accommodation model across NSW under both its Punthill and Veriu brands.
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June saw the launch of the Group’s second NSW Punthill property – the 52-apartment Punthill Parramatta, joining Punthill Norwest, which opened its doors in Sydney’s thriving Hills area mid-way through last year, and this latest property marks another important springboard for the Group’s ambitious growth strategy in the NSW market, with a number of further openings scheduled for the coming two years.
On the immediate horizon, the Group, partnership with HOLDMARK Property Group, is midway through construction of Veriu Macquarie Park. With 184 studio and one-bedroom apartments, this will be the Group’s largest hotel to date – and one of the biggest in the area.
A major business and technology precinct in Sydney, the suburb is home to numerous multinational corporations, research institutions, as well as Macquarie Hospital and Macquarie University, and attracts a high volume of business travellers and professionals attending conferences, meetings, and training programs. The new hotel is expected to cater to this demand and provide convenient accommodation options for corporate visitors.
Additionally, its proximity to popular tourist destinations including the Macquarie Shopping Centre, nearby natural parks, Sydney’s CBD and the northern beaches will make it an attractive base for leisure travellers who want to explore the region.
It’s one of two projects the Group is developing in partnership with HOLDMARK, the second being its new Punthill Ryde property which will soon commence construction.
Like Veriu Macquarie Park, Ryde is strategically located close to a number of major business districts and is expected to cater to a similar clientele. HOLDMARK Property Group is recognised as a prominent developer in Australia, especially renowned for its expertise in commercial, residential, retail, and mixed-use developments. Its extensive knowledge and understanding of the local market where both hotels are being developed was a significant factor in the decision to partner with it, added to which, it has a proven track record of successfully executing high-end residential developments .
Other NSW properties currently under construction, or about to commence, include the Group’s first regional property, Punthill Maitland opening in April next year; Punthill Liverpool due for completion in 2025; and the ACT’s Punthill Tuggeranong, its first office conversion, also slated for a 2024 opening.
The Group is also about to embark on a significant period of expansion elsewhere around Australia over the next 12 months. Construction is now well underway on its latest Victorian property, Punthill Sunshine, in Melbourne’s inner west as well as various sites in South Australia.
Though the last few years have been challenging ones for the property sector, that Veriu Group has continued to thrive amid current economic headwinds, interest rate rises and upward pressures on construction pricing, come as no surprise to CEO Zed Sanjana.
“I think our success is predicated on two things. First up, there’s our unique long-term lease model which has continued to prove a really attractive option for developers who are looking for certainty of income and ability to finance large-scale developments more easily in the current market.
“Secondly, we’ve always maintained a very disciplined focus on developing properties specifically situated to take advantage of substantial key catchment areas, which have been or are relatively underserviced in terms of quality corporate accommodation. If you look at our portfolio across both brands, every hotel is ideally positioned to be able to provide both corporate and leisure guests with premium accommodation in prime locations.”
Sanjana is also buoyed by a significant pent-up demand for travel which has resulted in remarkable growth in Average Daily Rates (ADR) by the end of December 2022, surpassing pre-pandemic rates in all major markets.
“Nationally, market ADR has increased by 24 percent over the year, reaching $228, which is 23 percent higher than the rates observed in 2019. That points to a strong recovery in the hospitality industry, with both ADR and occupancy trending positively and approaching, or even surpassing, the levels seen before the pandemic. We’re well positioned to meet this demand, and increased top-line performance is also significantly assisting our ability to provide developers with more compelling cashflows to support new hotel developments.”
Having now successfully established a comprehensive hotel offering throughout Australia’s eastern seaboard, Sanjana makes no secret of the Group’s ambition to become a national operator.
“Since 2020, the Veriu Group has grown its portfolio of hotels from 14 to 21, representing network growth of 50 percent. This number is set to rise to 25 with the openings of Veriu Macquarie Park, Punthill Maitland and Punthill Tuggeranong in 2024. We’re planning to commence construction on somewhere between four to six new properties around Australia next year, which along with Liverpool, Geelong and Sunshine, will ultimately boost our overall portfolio to in excess of 3000 rooms and apartments operating or in development across well over 30 sites under the combined Veriu Hotels & Suites and Punthill Apartment Hotels brands.”
He adds, “The Australian accommodation market has been consistently undersupplied for a number of years, particularly in terms of upscale and design-driven apartment hotels in key corporate locations, and we remain focused on bringing more unique and interesting accommodation options to CBD, suburban and regional markets, in new locations underpinned by the business travel segment, supported by business and industrial parks, universities, hospitals and major infrastructure projects.
“We’re currently targeting around 80 hotels by the early 2030s, partnering with top-tier developers and local businesses along the way and we have every confidence we are going to get there,” says Sanjana.
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