Ibis Newcastle was among the portfolio of hotels acquired by Iris Capital.

Signals that a rebound and recovery could be underway in hotel real estate transactions are starting to be felt in Australia, according to the 2020 Hotel Sales in Review report from CBRE Hotels.

The report, released this week, champions the cyclical nature of the hospitality and accommodation sector, squarely blaming the pandemic for the slower market activity in 2020 but identifying the recent AUD$180 million AccorInvest deal as the potential catalyst for the market’s recovery.

Late last month, Sydney-based Iris Capital signed to acquire 17 Ibis-branded hotels from AccorInvest – the share capital division of the multi-national accommodation and hospitality giant. The deal represents nearly 1,800 rooms and includes ibis hotels in city and airport locations across Sydney, Melbourne, Brisbane and Canberra, with the remainder operating as ibis Budget and dotted across airport and regional centres around Australia.

The Fantauzzo was snapped up by Crystalbrook Collection and will soon rebrand.

The largest single-asset transaction for the year, according to CBRE’s report, was the AUD$108 million purchase of Vibe Hotel Melbourne by Thailand’s Sino-Pacific Trading, which settled early this year. Other major moves included The Fantauzzo in Brisbane for AUD$67.2 million, which was picked up by Syrian billionaire Ghassan Aboud – owner of the Crystalbrook Collection of properties. The Novotel Brisbane was another major asset to change hands, moving for AUD$67.9 million to Amora Hotels and Resorts, which will see the Amora brand debut in the Queensland capital in 2021.

CBRE Hotels said many investors were adopting a ‘wait and see’ attitude until trading conditions started to improve, with the year seeing 17 transactions amounting to AUD$670 million recorded – a drop of 63% on the 10-year average annual sales volume of AUD$1.8 billion. Managing Director, Michael Simpson, said the Iris Capital sale heralded stronger times to come as the market rebounded.

The soon-to-be Amora Brisbane will rebrand from its current label as Novotel.

“The new year is likely to see improved activity as capitalised investors take advantage of emerging opportunities materialising from the COVID-19 induced market dislocation,” he said.

“After a very subdued first half, there was an uptick in sales volumes in Q3 and Q4, with recent sales activity being underpinned by mandates to acquire assets offering attractive discount to replacement value and potential for yield enhancement over the medium term, as trading markets gradually recover.”

CBRE Hotels is forecasting a surging return in sales activity in 2021, predicting lenders will act on distressed assets, mainly those which were struggling prior to the pandemic once the insolvent trading moratorium ends at the end of 2020. Liquidity conditions are tipped to improve for investors looking to take advantage of low interest rates, however lenders are still expected to be cautious in issuing new debt.