“Moreover, we are yet to see foreign capital act at its historic levels in the hotel space this year, unlike what has recently been witnessed across other CRE sectors, particularly office and industrial. To date, a number of offshore groups have indicated their preference to focus on what they perceive to be better value opportunities in other countries, however, we note that many are ready to move for the right deals or pricing in Australia’s major markets. History suggests such capital sources have been incredibly active in the aftermath of major economic disruptions."

This increased transaction activity in the core sectors was driven by further pricing discovery, as well as updated valuations that assisted in a closing of the bid-ask gap. Additionally, and similarly to hotels, transaction volumes in the other sectors comprise a number of deals that commenced some time ago and have taken significantly longer than traditional timeframes to complete. 

Breakdown of hotel investment market

Source: JLL Research