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Asia Buyers Snap Up Australian Hotels As Mining Boom Fills Rooms

Asia Buyers Snap Up Australian Hotels As Mining Boom Fills Rooms - Australia - property buyers - hotels

Sales of Australian hotels to offshore buyers set a record in the first half as Asian companies including Shangri-La Asia Ltd. (69), Starhill Real Estate Investment Trust (STRH) and Langham Hospitality Group were lured by rising occupancy and room rates.

Companies outside of Australia accounted for A$990 million ($1 billion) of the purchases, or 90 percent, through June 30, according to Jones Lang LaSalle Inc. That’s the highest first- half volume and percentage of the total since the Chicago-based broker began compiling comparable data in 2002. Hong Kong and Malaysian companies were the most active buyers.

The biggest resources boom in a century is boosting mining- related business travel to the biggest cities, where companies such as BHP Billiton Ltd. (BHP) are based, while the Chinese are leading a pickup in tourism. Investors are preferring to buy rather than build as construction costs rise, said Craig Collins, chief executive officer for Australasia at Jones Lang LaSalle’s hotel unit. That’s limiting the supply of new rooms.

“There are generally very few opportunities to gain a foothold in capital-city markets, so when they come up, the buyers pounce,” Collins said in an interview in Sydney. “When the cost to build is higher than the cost to buy, it’s a good barometer for the buyers.”


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