<a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, Castile, on the dress circle Skyring Terrace in Newstead.

VIP buyers are now being engaged, with a full public sales launch coming later this year.

Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371113]

The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;

CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;

“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371114]

“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;

The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;

Construction is scheduled to commence in September 2026.

[smartcode_project_cta:default project_id=150489]

Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.

Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.

What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.

The appeal is relatively straightforward: flexibility.

Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.

For apartment residents in particular, the system has become increasingly valuable.

Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.

Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.

That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.

Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.

The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.

Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.

Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.

The timing of that expansion aligns with broader changes in Australian shopping behaviour.

The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.

That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.

Parcel Locker systems have increasingly been viewed as part of the long-term solution.

The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.

Now, however, the convenience factor is driving mainstream usage.

For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.

The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.

The Parcel Locker model is also beginning to influence property development itself.

Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.

For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.

That reflects a wider evolution in how residential buildings are designed.

Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.

Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.

What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.

And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Hotel Market

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The Old Bank, the historic Mittagong property in the Southern Highlands, has been listed for sale after its decade long restoration.
The <a href="https://www.realestate.com.au/property-house-nsw-mittagong-130730858" target="_blank">property at 83 Main Street</a> has been acting as The Old Bank Hotel, but is now being offered as the potential to become a grand family residence.
Some 80 years after the settlement of Mittagong in the 1820s, the Southern Highlands town became home to many industries.
Following the 1867 completion of the railway line from Sydney, Mittagong became a gateway to the southern area and beyond, leading to the development of a tourist trade with inns, hotels, guest houses and shops becoming prevalent. 
The Commercial Banking Company occupied Waratah Cottage in the 1880s before relocating to Victoria House, some 500 metres away, before moving to the current property that was to be known as The Old Bank.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/3/28/Mitt2.jpg" alt="">
It was built in the late 1880s at a construction cost of around £2,840 on land purchased from John Hilder for £373. It opened its doors in 1891.
A complete restoration came following its $990,000 trade in 2009 when The Old Bank was bought as a hotel. CHECK.
Local craftsmen transformed the slate roofed and stone walled building which was falling into disrepair.
The main residence comprises six heritage-style bedrooms, which each have names stemming from xxxx. All complete with ensuite, the bedrooms are dubbed Clocktower, Gibraltar, Albert, Victoria and Alexandra.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/3/28/Mitt3.jpg" alt="">
They sit on the second level. The ground floor comprises an entry hall with reception and lounge, a private dining room, a library and a wine cellar.
The wine cellar was previously the original bank vault, which is to this day secured with a 1,000 kilogram door cast in London in 1852.
On the 1,095 sqm Main Street parcel are two freestanding buildings, the sandstock cottage and original coach house, both of which have been restored and now home self-contained accomodation. 
The Old Bank is being offered by Andrew de Montemas at W.M.Carpenter &amp; Associates Bowral.
He has a guide of $4 million.
 
 
 
 
 
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Mittagong's The Old Bank for sale as grand family home

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Australia remains a favoured hotel investment market due to its economic performance, stability, transparency and governance, Gus Moors, Colliers International’s Head of Hotels, says.
“With more than $1 billion worth of hotel assets currently being marketed or in play, we expect transaction activity to increase in FYE2019.”
Colliers International’s Capital Markets Hotel Investment Review found Australian hotel transaction activity slowed in FYE2018, with volumes easing to $1.34billion after a record three years.
Deal flow increased, however, with 35 transactions above $10 million concluding throughout the year. This compares to 30 transactions in FYE2017. In New South Wales, $350 million worth of hotel assets changed hands, followed by Queensland ($347 million) and Victoria ($343 million).
Australian investors accounted for 63.7% of asset trades in FYE2018, considerably higher than the 16.5% recorded in FYE2017.
Investors from Mainland China fell behind the rest of Asia as one of the more dominant sources of inbound capital, accounting for only 1% of transactions over the year, as capital restrictions continued to bite.
“This trend is likely to continue, with South East Asian investors dominating the offshore investment landscape driven by renewed interest in diversification, both in terms of location and product,” Mr Moors said. “
Colliers International found that for the first time for more than a decade, the number of rooms opening throughout the year surpassed the number traded with investors focused on the development of new rooms.
In FYE2018, almost 6,500 new rooms came on line in the ten major markets with an estimated value of more than $2 billion.
Colliers International estimates there is a weighted accommodation pipeline of around 27,000 rooms across Australia, with almost half of these new rooms currently under construction and 7,000 rooms proposed.
These are thought likely to commence construction in the next six months or are government mandated projects.
“All markets, except for Darwin and the Gold Coast, are seeing an accelerated pipeline with openings expected to peak in 2019 and 2020,” Ms Wales said.
“Development activity is greatest in Hobart, Melbourne, Adelaide and Perth with increases set to expand the existing supply base by more than one third.”
Mr Moors said tourism was becoming increasingly important as Australia transitions to a more diversified service-based economy, and had the potential to be Australia’s fastest growing industry.
“Globally, travel continues to take a larger share of consumer spending and visitor expenditure in Australia is projected to continue to grow at a strong rate,” he said.
“The influence of demographics presents new opportunities for the hotel sector, as developers and brands seek to remain ahead of the curve in catering to both established and emerging generations of corporate employees and leisure travelers.
He concluded by noting, "strong growth in inbound tourism, particularly from China, increased leisure travel by wealthy retiring baby boomers and catering to Millennials as the largest segment of the workforce are all factors which investors should consider over the coming year.”
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Investment in Australian hotels on the rise in 2018: Colliers International

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The Melbourne Luxury Hotel market is out-performing virtually all other markets in Australia, driven by record international and domestic tourist numbers, with significant further domestic and international inbound growth forecast, according to Tourism Research Australia (TRA).
Melbourne developer Argo Group has appointed Savills to market the turnkey opportunity of a brand new 93-room lifestyle hotel situated at 230 Toorak Road, South Yarra, one of Melbourne’s oldest and most affluent inner-city suburbs.
The listing comes with approved planning permit, with opening of the hotel proposed for mid-2019.
The Hotel is ideally positioned in the heart of the bustling suburb of South Yarra, on Toorak Road, at its intersection with the famous retail and leisure district of Chapel Street.
Designed by award-winning architects Woods Bagot, the lifestyle hotel will comprise 93 hotel rooms ranging in size from 26 sqm to 32 sqm across ground and six levels, as well as a signature ground floor bar and restaurant.
Delivery of the Hotel will be overseen by experienced project managers Construction Assignments, who have overseen numerous leading hotel projects across Australia, with leading Melbourne based construction firm Hickory being retained to build the hotel.
Michael Simpson and Tom Shadbolt of Savills Australia are marketing the property. They said this is an outstanding opportunity to acquire a highly coveted freehold title to a new lifestyle hotel that will outshine its rivals in design, technological advancement and customer experience.
“Melbourne has been independently voted as the world’s most liveable city for seven consecutive years," Simpson said.
"Combine this with a global reputation for design, fine dining, retail and leisure and the city has propelled itself to a ‘must-go’ destination for international travellers.
“Argo Group is offering to market an exclusive opportunity to gain exposure to Australia’s most desirable, most tightly held and most coveted hotel market, and the flexibility to appoint a preferred hotel operator with control over branding, market positioning and management terms.
“The design-led boutique Hotel will immediately appeal to discerning customers seeking high quality accommodation in the lively South Yarra district” Simpson concluded.
Savills have released their quarterly update on the hotel market. It can be <a href="http://www.savills.com.au/publications-pdf/savills-hotels-quarterly-update-september-2017.pdf?utm_source=PropertyObserver&amp;utm_medium=DigitalAdvert&amp;utm_campaign=CPOeNewsletterBanner-HotelsUpdate-22Nov2017&amp;utm_source=Property+Observer+List&amp;utm_campaign=3fe0087e5e-Commercial_Property_15_November_2017&amp;utm_medium=email&amp;utm_term=0_a523fbfccb-3fe0087e5e-245386345" target="_blank">found here.</a>
 
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Melbourne Luxury Hotel market is out-performing virtually all other markets in Australia

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Hotels are hot property for investors at the moment, outperforming all other property classes in Australia, says a recent report by Savills.
With international and domestic visitors growing 11.5 percent and 5 percent respectively in CY 2016, the hotel industry has not seen growth at this level since the Sydney 2000 Olympics, according to Savills Australia’s Hotels market report. 
Sydney and Melbourne are the standout performers, with their strong market KPI’s against a backdrop of compressing yields.
Chinese tourists take the lead in international visitors, growing at 22 percent, helped by more flights between the two countries and a relatively low Australian dollar making the country a more affordable destination, says Michael Simpson, Savills managing director of Hotels. 
“In a very positive sign for the depth of the market, the outstanding international inbound growth has been experienced across a wide range of markets, with inbound visitor growth from many established Asian markets, as well as the US, above 15 percent,” said Simpson.
In further proof of the strength of the market, Tourism Research Australia’s 10-year forecast expects international visitor nights and domestic visitor nights to grow at 5.6 percent and 3.1 percent annually respectively. Australia can expect to see increased room night demand nationally for the foreseeable future.
The Australia-wide market achieved a ‘revenue per available room’ (RevPAR) for CY 2016 of $139, which represented YOY growth of 2.2 percent.
All Australian cities posted RevPAR growth except Perth, Brisbane and Darwin with RevPAR declining in those cities by 9.3 percent, 8.7 percent and 9.6 percent respectively. The decline in performance of these markets is primarily due to the impact of the end of Australia’s resource boom, and rise in room supply.
For the remaining markets, Savills says growth in market KPI’s can be attributed to an increase in leisure demand from domestic and international markets, stimulated by a lower Australian dollar and stronger economic activity underpinned by construction and infrastructure projects.
<a href="https://www.propertyobserver.com.au/images/2017/03/28/SavillsHotels.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/28/SavillsHotels.png" alt="">
China is the engine room for visitor night growth in Australia right now, says Simpson. 
Australia received more than 7.4 million international visitors (up 11.5 percent) and 251 million international visitor nights (up 3.8 percent) for the year ended September 30, 2016.
Tourism Research Australia recently released international visitor numbers for CY 2016 which totalled 8.3 million, representing a healthy year-on-year (YOY) growth of 11 percent. 
The New Zealand market continues to contribute the highest number of visitors to Australia. However, the China visitor market recorded YOY growth of 21.9 percent, enabling it to exceed 1 million visitors, who more importantly spend an average of 40 nights in Australia when touring Down Under. 
As a result, China produced 43 million room nights representing almost three times the volume produced by New Zealand. The Chinese visitors also tend to spend more per capita compared to other visitors.
<a href="https://www.propertyobserver.com.au/images/2017/03/28/SavillsHotelDeals.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/28/SavillsHotelDeals.png" alt="">
Simpson went on to say that Sydney’s strong performance is set to continue with occupancies reaching capacity during peak holiday and corporate activity periods, providing the opportunity for hoteliers to grow ADR.
“Sydney’s Luxury segment capitalised on the strength of the market achieving an occupancy of 85.9%, and ADR of $339 (up 7 percent), delivering a RevPAR of $291 (up 5.7 percent), which exceeded Melbourne’s Luxury segment RevPAR of $271.
“The key factors underpinning Sydney’s current and expected future performance are a combination of buoyant economic metrics, strength in banking, finance, insurance, professional services and construction/ infrastructure projects, which are collectively fuelling a tsunami of economic activity and room night demand in Sydney.
“For the next 10 years, Sydney occupancy will remain in the 80th percentile,” said Simpson.
Melbourne was the second highest performing market in CY 2016 with an increase in occupancy for the fourth consecutive year. Conversely, Average Daily Rate (ADR) declined marginally, suggesting that while occupancy remained strong, hoteliers were unable to grow rate during non-peak periods. As a result RevPAR remained relatively stable in CY 2016, when compared to CY 2015.
Simpson said the inability to significantly grow ADR in CY 2016 is also demonstrated by Melbourne’s Luxury segment which reflected steady YOY market KPI’s, achieving an occupancy of 89.5 percent, ADR of $302 and delivering a static RevPAR of $271.
“Melbourne’s construction boom of residential apartments, commercial space and continuing development of Docklands, has also encompassed new hotel development,” he said.
“Despite the strength and enduring nature of Melbourne’s events calendar and symbiotic corporate activity Melbourne enjoys with Sydney, we anticipate that Melbourne market KPI’s will be under pressure to match Sydney’s performance in coming years given the relative challenge of delivering new supply in Sydney.” 
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Hotels become Australia’s highest returning real estate asset class: Savills 

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GUEST OBSERVER
Q3/2016 registered US$2.26 billion worth of investment transactions, representing a 15.0 percent increase over Q3/2015 (US$1.96 billion).
The number of transactions was also significantly lower.
Forty transactions were closed this quarter, while 46 transactions were recorded over the same quarter the previous year. The average transaction price was US$56.4 million, which was signi cantly higher than the US$42.6 million in Q3 a year ago. Japan commanded the largest share of total sales volume in the region this quarter, and all 13 transacted assets were acquired by Japanese investors. We expect growth of transaction volumes for the region for full-year 2016 to be subdued, mainly due to the lack of opportunities in core markets.
Eastern Asia
Japan continued to be one of the most active markets in APAC. Despite a quarter-to-quarter decline in sales volume of 32.1 percent, the total volume of JPY88.2 billion (US$865.5 million) was still the highest in the region. The hotel investment market has seen a series of large transactions in 2016, even as other sectors of Japan’s real estate market have retrenched.
Japan’s explosive growth in inbound tourism and its chronic lack of room supply have created a real interest in the hotel market, and players are leaping to take advantage. The Real Estate Investor Survey by the Japan Real Estate Institute (JREI) reports that expected cap rates on economy hotels in prime Tokyo locations have compressed from 5.4% to 5.0% since 1H/2015.
Hotel transactions frequently occur outside the nation’s capital, however – only seven transactions occurred in Tokyo in 1H/2016, according to Real Capital Analytics – resulting in a wide range of cap rates. We assume actual transaction cap rates to be much lower than JREI’s surveyed gure of 5.0 percent, because winning bidders tend to expect aggressive increases in ADR.
The largest buyer of the quarter was Japan Hotel REIT Investment Corporation (JHR) with the purchase of three hotels – Hotel Vista Grande Osaka, Hilton Nagoya and Hotel Ascent Fukuoka. The total sale was worth approximately JPY47.1 billion. Hotel Vista Grand Osaka will be rebranded into Holiday Inn Osaka Namba by the end of 2016, according to a JHR press release. Hotel Vista Grande Osaka was the largest transaction in Japan, sold by GK Apollo for JPY27.0 billion (US$267.3 million), or JPY85.9 million (US$851,275) per key. This was followed by Hilton Nagoya which was acquired at JPY15.2 billion (US$150.9 million), or JPY33.1 million (US$328,207) per key.
In June, Japan's Land, Infrastructure, Transport and Tourism Ministry announced a plan to relax the oor area ratio of buildings by 1.5 times, or up to an additional 300 percent for hotel constructions. The new standards are expected to substantially increase accommodation capacity following Japan`s continuous increase in foreign visitors and the upcoming 2020 Tokyo Olympics. Although based on this relaxed regulation, each local government is required to decide on their regional floor area ratios under the City Planning Law, and therefore the price of the land for hotel usage in major cities is expected to increase.
In China, sellers’ expectations remained high, and the continued lack of debt nancing for hotel projects has led major Chinese hotel investors to continue to look overseas for either tourism-related investments or refocus into investing in commercial assets or companies in other industries with high growth potential.
Chinese investors’ interest in Australian assets was evident in this quarter, concluding ve transactions there with a total of A$474.7 million (US$352.8 million), representing 15.6% of total volume in the quarter.
Hong Kong’s rst transaction of 2016 was closed this quarter, with the sale of A3 Hotel in Temple Street at HK$108 million (US$13.9 million), or HK$2.4 million (US$309,400) per key.
Southeast Asia
There were only two transactions in Southeast Asia this quarter. The Renaissance Kuala Lumpur Hotel changed hands between IGB and S. Alam Group for MYR765 million (US$187.4 million), or MYR840,659 (US$205,890) per key.
There was no transaction in the same period the previous year. Malaysia has suffered from the sharp fall in international tourist arrivals, particularly those from China, since the airline disasters of two years ago. This quarter, however, the Malaysian Inbound Tourism Association reported that the Chinese source market had shown some signs of recovery. According to Tourism Malaysia, international visitor numbers for 1H/2016 grew 3.7 percent, with remarkable increases from China and Thailand at 32.1 percent each and Laos at 26.8 percent. 
The Singapore hotel investment market remained inactive this quarter, due mainly to the lack of suitably priced assets and the tightened control of room stock by the Urban Redevelopment Authority. In Q2 and Q3, some 2,200 new rooms were added, mostly outside the central area, and 66 percent of the total was in the midscale category. Room nights sold for 1H/2016 rose 6.4 percent year-on-year, according to the Singapore Tourism Board. As of July 2016, the city state registered an increase of 11.5 percent year- to-date (YTD) for inbound international visitors. The Chinese source market jumped remarkably by 49.2 percent, followed by Thailand at 14.9 percent. This upward trend, however, is likely to be impacted to a certain extent by the Zika outbreak in August which has prompted a few countries to issue advisories warning travellers of the dangers of the mosquito-transmitted disease.
Australia and New Zealand
There were 17 transactions in Australia, totalling approximately A$943.2 million (US$716.4 million) this quarter, compared to 16 in the same period last year. In terms of volume, however, there was a remarkable increase from A$381.2 million (US$282.3 million) recorded in Q3/2015 compared to this quarter.
One recent notable sale was that of Novotel Melbourne on Collins from LaSalle Investment to Singapore- listed Frasers Hospitality Trust for A$237 million (US$ 178.7 million), or A$623,684 (US$470,290) per key. The purchase was part of the Trust’s plan to grow its hotel portfolio. Melbourne’s hospitality sector has been given the boost to grow, driven by the completion of Melbourne Airport’s Terminal 4, the expansion of the Melbourne Convention and Exhibition Centre, and development of several projects such as the Docklands and Fishermans’ Bend. Tourism Australia expects total visitor nights in the state of Victoria to grow at an average of between 4.0% and 4.6 percent for the next three years.
So far this year, the Australia market has been resilient and attractive for overseas investors due to its currency uctuations which has led to an increase in inbound travellers and, consequently, hotel performance.
New Zealand has captured a fair amount of interest from investors so far this year. Investment volume for the rst three quarters of this year totalled NZ$236.4 million from 11 transactions. New Zealand Trade and Enterprise released a report this year pointing out the shortage of hotel rooms in the country and highlighted investment opportunities to cope with this shortfall, especially in key cities such as Auckland, Queenstown, Rotorua and Christchurch. It also reported that in 2015, Auckland and Queenstown had consistently high occupancy rates of above 80 percent throughout the year, while Rotorua and Christchurch had seasonal peaks of also above 80%. Based on historical preferences, upscale and luxury rooms are expected to have a strong demand.
In recent years, New Zealand has seen remarkable growth in international visitor arrivals, rising 9.6 percent for full-year 2015; growth for the eight years prior to this did not rise above 6.0 percent. For 2016 YTD July, international visitor arrivals grew an impressive 11.2 percent. 
 
Simon Smith is senior director, Research and Consultancy, Hong Kong Savills and can be contacted <a href="https://www.savills.com.au" target="_blank">here</a>.
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Australian hotel market resilient, attractive for overseas investors: Savills

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SPONSORED POST 
Visitors add an average of 3 percent to a city’s population every night, posing significant opportunities for hotel, leisure and retail operators, according to the latest <a href="https://pdf.euro.savills.co.uk/global-research/12-cities-h2-2016---visitors.pdf" target="_blank">Savills 12 Cities Report H2/2016</a>. 
The report found that around 901 million domestic and overseas visitors were attracted to the twelve cities examined during 2015. They spent a total of 1.05 billion nights in hotels or other guest accommodation. In some cases, such as New York and London, the visitor populations were equivalent of another city.
<a href="/images/2016/11/14/The%20size%20of%20the%20visitor%20city.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/14/The%20size%20of%20the%20visitor%20city.jpg" alt="">
 
Visitor breakdown – who is visiting and why? According to the report, the split between domestic and overseas visitors varies widely between cities. In most, especially those with vast hinterlands such as USA, China, Australia and Russia, more visitors come from the home country. With a relatively high number of domestic visitors (9.20 million), Sydney is also experiencing a growth in international visitors (3.75 million) underpinned by strong holiday and education segments. London, with a relatively small UK hinterland, has the highest number of overseas overnight visitors (20 million) but fewer domestic visitors (13 million). View the full domestic/international visitor breakdown in the <a href="https://pdf.euro.savills.co.uk/global-research/12-cities-h2-2016---visitors.pdf" target="_blank">Savills 12 Cities Report</a>. 
It’s easy to assume that the attraction of global cities is all the history, buildings, culture, entertainment, lifestyle and leisure that they offer, and that it is tourists who make up most of their visitors. On average, 77 percent of international visitors to the cities in the Savills 12 Cities Report are there for leisure, tourism and reasons other than business, such as meeting up with friends and relatives.
Shanghai has a large percentage of international business visitors (55 percent) as it is not a prominent international leisure destination, especially compared to cities such as Rio de Janeiro and Sydney, which have a large proportion of tourists and other types of visitors seeking sunshine and lifestyle experiences. 
<a href="/images/2016/11/14/thumbnail_International%20Overnight%20Visitors.jpg" target="_blank">Click to enlarge</a>
 <img src="/images/2016/11/14/thumbnail_International%20Overnight%20Visitors.jpg" alt=""> 
Impact on the hotel, leisure and retail industries
Across Savills 12 cities, international overnight visitors spend a total of US$132.6 billion a year when they visit, 30 percent of it on accommodation. In this way, city visitors are participating in the real estate markets of cities every time they pay their hotel bill. This is also true of retail, food and beverage spend, which helps create demand for space and to pay the rent on these premises. They also support industries outside of the hospitality sector, such as airports.
George Nicholas, Global Head of Hotels at Savills, comments: “As global tourism continues to rise, demand for bed space in many city markets is now outstripping supply. For example, Tokyo has had an influx of tourists from China following the relaxation of Visa requirements and the city now has a chronic shortage of rooms, while in London, the fall in the value of the Sterling is attracting visitors who previously thought the UK’s capital too expensive. The net result of this is that we’re seeing a shift in where investor appetite for hotel assets and platforms stems from, with Asian capital in particular coming to the fore in Europe over the past twelve months.” Yolande Barnes, Director of Savills World Research, adds: “It’s not just the market for hotels and hotel land upon which international visitors have an impact. Across nine top global cities including New York, London and Paris, annual food and beverage spend by international visitors totals at least US$21 billion a year and shopping accounts for US$38 billion. Restaurants, bars, cafes and shops are significantly impacted by these revenue inflows, so ensuring that there is enough space to accommodate visitors is therefore not just imperative for the hotels sector, but also for the wider city economy.”
To learn more about the latest trends in world real estate, visitor cities and economic outlook, view <a href="https://pdf.euro.savills.co.uk/global-research/12-cities-h2-2016---visitors.pdf" target="_blank">Savills 12 Cities Report H2/2016</a>.
Savills is a leading global real estate service provider offering the full spectrum of services from strategic advice to managing assets and projects and transacting deals. To learn more about Savills, visit <a href="https://www.savills.com.au" target="_blank">savills.com.au</a>.
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Swelling visitor numbers pose opportunities for global cities

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Hoteliers the Grove family have bought back The Indian Ocean Hotel in Western Australia’s Scarborough from the receivers, shortly after it was put up for sale.
The family acquired it for an undisclosed sum, but it had been offered for about $18 million on a 7 percent yield when first put on the market more than a year ago, according to a report in The Australian Financial Review. 
The 59-room, 3.5-star hotel on Hastings Street in the city's north-western suburbs was being marketed by CBRE Hotels’ Ryan McGinnity and David Kennedy under instruction from the receivers and managers appointed, HLB Mann Judd (Insolvency WA). 
The marketing campaign closed on May 12.
The five-level, 59-room hotel includes Indi Bar and Bistro, and has hosted some of Perth’s best live music over the past two decades, including Rolling Stones, The Waifs, John Butler and Dave Hole.  
The hotel, built in 1972, was placed in the hands of receivers in April after the death of majority owner Bill Grove, said the AFR report. 
It was originally called the White Sands Hotel. The Grove family took over as managers in 1985 and renamed it the Indian Ocean Hotel in 1990.
Hotel owner Andrew Grove and CBRE’s selling agents declined comment to the AFR, but the paper cited a source close to the family as saying that "The property and business is now back in the hands of the family who have owned the property for over 30 years” and they are “excited to be in control of the business and property again”.
Located within the Metropolitan Redevelopment Authorities’ $57.4 million Scarborough Redevelopment Area, the Indian Ocean Hotel offers potential for future development, with a residential 160 zoning and additional special use as hotel. 
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