Motels: There has been strong demand for good quality motels, both leasehold and freehold in Queensland and NSW with a lower demand in Victoria. The most popular areas being coastal and locations associated with the mining and energy sector .A sample of 32 lease sales for QLD revealed an average of 34% Net on sale price, 25% rent% of turnover and , the average net return % of turnover as 29% after rental.
Comparing QLD to NSW, for NSW a sample of 71 sales that averaged 32% Net on sale price, 27% rent% of turnover and , the average net return % of turnover as 35% after rental. Victoria is considerably different with 5 yearly fair market rent reviews legislated for leases with rental and returns reduced accordingly. The retail leases Act in Victoria is seen by many investors as a detrimental influence upon the investment market when compared to NSW and QLD, but there are a number of benefits that can be highlighted to keep them on par.
Of particular mention for motel leasehold purchasers is the Victorian Retail Leases Act that from a lessee's point of view, it puts some comfort into a system that allows ratcheting down, as well as up, removes the land tax responsibilities which can add value to the leasehold (by up to $120,000 (based on a $40K land tax) and means that you go to market every five years to the benefit of both landlolrd and tenant and makes it decidedly clearer as to whom is responsible for what.
Benefits for leases in Victoria and grey areas for investors.
For the hands on up to date information, please speak to any of our team members, we are all more than happy to assist.
Michael Philpott
Director
043 313 7927
Document: 
Tourism Brokers - Introduction mp Sept 09.pdf
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