Quest lists Sydney Olympic Park serviced apartments as appetite for Australian hotels rises
Fast-expanding serviced apartment group Quest has listed its Sydney Olympic Park apartment hotel for sale seeking around $39 million.
The group is looking to free up cash to fund the development of more than a dozen new serviced apartment projects and tap into growing investor demand for Australian hotels and serviced apartments, particurlarly from Asian investors.
Total hotel sale activity for 2012 was in excess of $1.25 billion, an increase of 30% on the total value for 2011 and the strongest since 2007, according to Colliers International.
Asian-based funds accounted for more than 70% of all sales, with investors from Malaysia, Hong Kong and Singapore the most prevalent.
The largest hotel transaction to occur so far in 2013 is the sale of the 4.5 star Holiday Inn on Flinders in Melbourne, which sold to New Zealand based Priscilla David Ltd for $50 million. Going against the recent trend, the hotel was sold by an Asian investor, Singapore-listed Lasseters International Holdings.
Last year, the largest single hotel property sale was the purchase of the Shangri-La Hotel in Sydney for $330 million by Hong Kong based Shangri-La from the Government of Singapore Investment Corporation.
Should the sale of the Sydney Olympic Park hotel prove successful, Quest will look to sell a further $170 million worth of apartment hotels to fund $220 million of new Quest projects.
In February, Quest announced plans to build ten new apartment buildings in NSW by 2014 in addition to three new properties that will open in Queensland, one in outer Melbourne, one in regional Victoria and another in the Adelaide CBD this year.
The group currently has over 150 serviced apartment properties in Australia, New Zealand and Fiji, located in CBDs suburban and regional areas.
The Sydney Olympic Park property, featuring 140 studio, one, two and three-bedroom apartments, each with kitchen and laundry facilities as well as a café, gym, conference room and basement car park.
It is being sold by Mark Durran and Peter Harper of Jones Lang LaSalle.
It opened in October last year, built at a cost of $30 million with the aim of tapping into the growing Olympic Park business hub, which attracts around 10,000 employees a day.
The newness of the building means it is being offered “with substantial depreciation benefits”.
Meriton paid a reported $22 million plus to buy a 15,000 square metre site with plans for 300 apartments in Sydney’s Olympic Park in February this year.
Quest at Sydney Olympic Park is the only serviced apartment in the area.
Quest has a long-term lease over the property.
Earlier this month, Quest said it would target the growing number of extended-stay business travellers in Queensland, with five new properties across the state to open in the next 12 months.
