Strong demand for corporate accommodation has made Perth’s hotel market the fastest-growing hotel sector in Australia and has prompted the owners of one of the city’s key hotels to put up the for sale sign.
The Novotel Langley Perth, the 4 1/2 -star hotel occupying a key site on Adelaide Terrace, has been listed for sale with Jones Lang LaSalle. Owner Tourism Asset Holdings Limited, the biggest owner of hotels in Australia, said unsolicited inquiries had been received for the hotel and by selling, it hoped to capitalise on the increasing investor demand for WA hotels.
“TAHL has received significant, unsolicited buyer interest and inquiry for some time now about the Novotel Langley Perth,” Matthew Eady, chief executive of Tourism Asset Holdings Limited, said.
“The hotel has performed exceptionally well for us and is already trading materially above its strong budget for 2012.”
The sale will allow the investment company to rebalance its portfolio, which will still include six WA hotels.
It’s the second time that Tourism Asset Holdings Limited has attempted to sell the hotel. In 2009 it was listed for sale, again with Jones Lang LaSalle, but was not sold and was withdrawn from the market.
The company bought the 253-room hotel for $35.6 million in 2004.
Jones Lang LaSalle expects the sale will draw strong attention from investors globally as they compete for a foothold in Perth’s market and the company’s Australasia’s chief executive Craig Collins said Perth hotels had recorded the highest RevPAR (revenue per room) growth of any Australian city during the past year because of accommodation demand from the mining and resources sector.
“Significant investment will also be devoted to the transformation of Perth, particularly in the CBD, and this should generate additional demand for accommodation over the short to medium-term,” Mr Collins said.
Aaron Desange, vice-president of investment sales at Jones Lang LaSalle Hotels, said with limited new supply and no sign that demand was waning, the outlook was strong for Perth’s hotel market.
Mr Desange said average occupancy levels increased to 85.2 per cent, compared with 82.5 per cent in 2010, while the average daily room rate for Perth last year was $204, a 12.6 per cent increase on the previous year. “The increase in Perth’s average daily rate was the biggest driver of RevPAR, which finished the year 16.3 per cent higher than the previous year,” he said.
Mr Desange said the Novotel Langley Perth historically traded above market. “With its location close to the major office towers of Perth and future demand generators, including the Perth Arena, the waterfront development and Riverside, we expect the hotel to be hotly contested among investors looking to take advantage of the hotel’s positive trading outlook.”
The hotel will be sold via an expression of interest campaign that closes on March 22.
“The hotel has performed exceptionally well and is already trading materially above its strong budget for 2012.”” Matthew Eady, Tourism Asset Holdings