Indian property bargain hunters are looking into country motels and hotels, springing a broader slowdown to surpass Chinese and domestic investors in Australia’s regional housing sector.
Information from HTL Property has discovered a substantial swing between regional accommodation buyers, with Indian investments flowing into the segment.
Before the pandemic, Chinese and domestic customers were the most common players in regional accommodation transactions, but HTL Property administrator Nic Simarro informed realcommercial.com.au that Indian consumers now justify higher-than-average inquiry levels, with numerous new hotel and motel purchases seen in the regional hubs of Tamworth, Bathurst, and Dubbo.
The potential buyers for regional accommodation have slowed down, Mr. Simarro said.
Fundamental assets in the main regional centers as Tamworth and Port Macquarie are experiencing a flood of purchasers, but it’s more difficult to find buyers when looking at smaller markets as these assets are appropriate to owner-operator groups rather than larger funds.
There are still sales in the smaller markets but the usual purchasers that individuals would have realized over the previous couple of years have been substituted by new candidates.
It is noticed that several Indian buyers with wealth to utilize, and it’s started to offset the Chinese and domestic capital in the regional markets.
As capital in the Indian region increases, we imagine this to continue to surge.
Nearly half of the inquiries on the newly sold McNevins Tamworth Motel in Tamworth were from the Indian capital.
Indian consumers also made up more than a quarter of inquiries for the Havannah Housing property in Bathurst and the Quality Resort Siesta Hotel in Albury.
However, inquiries from Chinese investors were lower than 10% for each of those listings.
Mr. Simarro informed Indian investors were frequently looking at industries where they could manage and function their profit lines such as lodging and convenience retail.
Commercial properties contributing high yields and value-add prospects were also considered, he said.
India has been a minor overseas capital source for the commercial property market in Australia, which has stood dominated by Hong Kong, China, Singapore, Japan, and the US, among others.
Mr. Simarro is anticipating strong interest in his newest listing, Motel Molly in Mollymook towards the South Coast of NSW.
He said the Richard Stanisich-designed property, situated close to Mollymook Beach, was anticipated to appeal to a range of investors from seasoned funds to new applicants.
The 1980s-built former Surfbeach Motel was converted into high-end coastal lodging in 2022.
It arises as Australia’s tourism market endures to improve from the pandemic, according to the newest statistics from Tourism Research Australia.
Local tourism observed a total spend upsurge 24% to $108.7 billion during the year to September 2023, with nights away and overnight journeys up 10% and 7%, respectively.
Foreign visitors spent $39.7 billion in the same period, reflecting 88% on pre-pandemic levels.
More generally, Australian hotel and accommodation transactions fell 12% to around $3.3 billion in 2023, according to MSCI statistics.
Ben Martin-Henry, director of real assets research, Pacific at MSCI, said the reduction in hotel deals had added to yield compression during the year and concluded in a 6.7% yield at year-end.
After being closed for much of 2020 and 2021, hotels have realized a rebirth in room nights, resulting in amplified investor appetite, he said.
PropTrack senior economic expert Anne Flaherty said inquiries to buy hotels on realcommercial.com.au held firm at a nationwide level over the past 12 months, however performance was mixed by state.
More investors are aiming Queensland and South Australia than a year ago, whereas demand has relaxed in Western Australia and Victoria,” Ms. Flaherty said.
