Australian hotel owner-operator Pacific Hotels is bringing a Brisbane asset to the market amid strong demand for accommodation investment opportunities in the 2032 Olympics city. The sale campaign for The Pacific Hotel follows the recent sales of Inchcolm by Ovolo Hotel Spring Hill, Sofitel Brisbane and Quest Chermside – all of which were negotiated by CBRE Hotels.
Singaporean groups acquired two of the assets, with Inchcolm by Ovolo bought for $25 million by Invictus Developments and Sofitel Brisbane purchased for $177.7 million by CDL.
CBRE Hotels’ Wayne Bunz and Hayley Manvell have been exclusively appointed to steer the Expressions of Interest campaign for the freehold going concern interest in The Pacific Hotel. Situated on a 2,899 sqm freehold land parcel, the 4.0 star, 12-storey asset comprises 179 guest rooms and suites of various configurations, ranging from 27-58 sqm in size.
The hotel underwent a significant $8 million refurbishment in 2019/2020 and offers significant guest facilities including the Osteria Roma Restaurant, multiple conference and events spaces, an outdoor swimming pool, a gymnasium, guest laundry and 78 car spaces over four levels.
The sale is expected to generate significant local and offshore buyer interest, underpinned by both the growing infrastructure and tourism amenities being developed in the city and the current strength in Brisbane’s tourism market.
Domestic demand has experienced 22.7% growth from pre-pandemic levels while domestic spending has risen by 45% – the second-highest growth rate in Australia.
Mr Bunz noted, “Hotels continue to be an asset class of choice given the sector’s positive market fundamentals and attractive risk-adjusted returns. We are seeing a broad range of investors seeking growth via hotel assets, and with international tourism still recovering, particularly from China, we forecast this growth to continue.”
“We are seeing a resurgence of investment activity in the Australian hotel sector as both local and overseas buyers see long-term potential for higher returns than those offered by other countries or property sectors.
“Brisbane in particular, is one of Australia’s most sought-after hotel investment markets. With the Olympics occurring in 2032, the city is viewed as a tier 1 destination for astute hotel investors, with revenue per available room (RevPAR) having risen by 49% since 2019.”
Currently owner-operated under the Pacific Hotel brand, the asset is being offered for sale with vacant possession, with the future operational flexibility expected to be one of the biggest factors driving broad investor interest.
“This is an exciting opportunity for an international operator to get a foothold into the hottest hotel market in Australia and have their brand on the world stage leading up to the 2032 Olympics,” Mr Bunz said.
Brisbane’s strong demand trajectory coupled with a limited supply pipeline due to elevated construction costs is underpinning the market’s performance.
With future demand growth over the five years to FY 2027 forecast at 5.47% per annum, CBRE Hotels Director Hayley Manvell said The Pacific Hotel offering presented an opportunity to acquire a strategic foothold in one of Australia’s most sought-after hotel markets.
“The hotel is positioned at the doorstep to a number of Brisbane’s forthcoming tourism, entertainment and transport developments, including being adjacent to the Brisbane Live Entertainment Arena, a 17,000-seat CBD venue hosting the 2032 Olympic and Paralympic Swimming and Water Polo finals,” Ms Manvell said.
“The asset also comprises long-term development potential, being under the Spring Hill Neighbourhood Plan, which allows a maximum height of 20 storeys for sites above 1,800sqm. This provides the ability for a new owner to add up to an additional eight storeys to increase the room inventory or introduce a mixed-use element to the asset.”
The Pacific Hotel Brisbane is being sold via an Expression of Interest campaign, which is due to be launched later this month.