Tourism Market Activity


Market Reviews – Leaseholds, Freeholds, Investments, Caravan Parks

Leasehold Motel Market

A large number of enquiries for leasehold motels, preferably Bed and Breakfast (B&B) are being received for price levels from $150,000 to $1.5 Million. Leaseholds that had been available with little interest shown in them are now seeing some movement with a number inspected by potential purchasers.


Motels with restaurants are taking longer to sell then the standard B&B operations, but that is largely due to the workload required and the property position.


Freehold Motel Market

This market has continued to strengthen with a genuine shortage of good stock with strong returns. Price is still a main factor for demand with the demand for smaller freeholds remaining strong, and this has now spread to the larger motel market. There has been excellent activity with many sales being successfully negotiated on freehold motels in the past 6 months by Tourism Brokers. Price ranges from $500,000 to $3 Million have been achieved with increasing levels of demand for properties in the higher price brackets up to $6M.


We are even seeing some of the motels being purchased for re-development and higher uses which is starting to alter the industry even more.


Investment Motel Market

Continually a shortage, we have sold a number of properties with Net returns less than 10% with some (few) exceeding. Demand keeps growing and growing for motels that are leased. Supply cannot keep up with demand at present, which has been the case for some time. Long leases with 10% - 11% net returns are proving to be most popular with investors. Good tenants and long leases with good net returns are the investment properties much sought after.


Position continues to play a significant factor. Motels do have some maintenance requirements and risks associated that some Commercial properties do not, but these are reflected in the returns. 9% Net is still a solid return after costs for a property with CPI increases and a 30 year agreement, as we are seeing in NSW and QLD. This influence is increasing and the national Australian market is following the demand and starting to offer similar opportunities. 

Victoria seems to be a little different with fixed CPI increases for 30 years being illegal and having the need for 5 yearly market reviews as required under the retail tenants legislation. This is an additional protection for motel leases, but raises a number of issues for motel investment opportunities.


Caravan Parks

The season for most Caravan Park owners is well underway. As parks continually upgrade to meet market and consumer trends, we are seeing a number install ensuite cabin style accommodation in the caravan parks and enhanced services that are enhancing the caravan parks and are taking them closer to manufactured home estates, but increasing the experience for short term stays, most commonly holiday stays.

As the number of Coastal Motels have been diminishing for redevelopment and Management Rights increase with the creation of strata and community title land developments, we are seeing a strengthening of some parks as they are re-vitalised with new amenities blocks, upgraded cabins and better facilities.

Enquiry levels and sales of Caravan Parks for sale over the last 12 months has been extremely buoyant. Most buyers have been from New South Wales, Victoria, Tasmania, New Zealand etc and have been chasing a lifestyle change and are generally over 50 years of age. We are seeing a lot of first time operators enter the market and some increased institutional demand.

In addition to the starter market, the Institutional / Corporate purchasers are also looking as we have been working very closely with a few major Groups that are looking to buy a number of Caravan Parks. The most common request has been for parks located on or near the coast and showing reasonable returns under management.

Yields have been strong for the larger parks over the last 12 months with a number selling in the 13% -14% net return range. The simple fact is there are many more Buyers wanting to buy than there are Sellers wanting to sell at the moment. With the cost being one factor involved, some of the sales are needing more input and assistance with highlighting the future, the needs and opportunities of the parks with business plans being created etc.


Motels for Sale

Caravan Parks for Sale

Hotels for Sale