BY RODERICK EIME
Despite a shortage of CBD rooms and a predicted trend for further inventory, WA developers are lamenting their inability to build new properties in the capital.
According to a report last week on News Ltd’s PerthNow website, CB Richard Ellis WA senior Managing Ddirector Peter Agostino, says it’s simply not feasible to build a hotel in Perth.
“For what it costs you to put up a room and what you can get as an average room rate and average occupancy, it just does not stack up,” Agostino told a Property Council of Australia event last week.
“So the sad reality is while Perth desperately needs more hotel rooms, and a lot of our hotels are ageing and so on, without significant government incentives you will not get one off the ground.”
The report goes on to say that the 223 new rooms added in the past four years have come online as a result of building conversions.
“They cost $400,000-plus a room to build, and the room rates and consistency in achieving the room rates just aren’t there,” he said.
PrimeWest chief investment officer, Mark Vonic, agreed saying that his proposal for hotel funding in the city was dismissed outright by his Sydney colleagues.
To read the full report, go to: http://www.perthnow.com.au/business/news/hotels-cant-be-built-in-perth-experts/story-e6frg2qu-1226032165224