French investment company AXA has spent $330 million acquiring four hotels from Australia's biggest hotel group AccorHotels, in the biggest deal in the sector to date.
The play is the largest the AXA investment unit has made in Australian property since it bought the Eureka funds business in 2016.
AXA has snapped up 831 hotel rooms across the five-star Pullman Sydney Olympic Park, with 218 rooms, Novotel Sydney Olympic Park, with 177-rooms, Ibis Novotel Sydney Olympic Park, with 150-rooms and the Novotel Canberra, with 286-rooms.
The acquisitions reflect the shift in investment sentiment towards the hotel sector which is currently reaping dividends from Australia's booming tourism industry.
The move also looks to tap into the Sydney Olympic Park's bustling event schedule having hosted 5,500 events between 2017 and 2018 attracting 10.5 million visitors.
The newly-acquired Olympic Park hotel portfolio, which was developed for the 2000 Sydney Olympic Games, is operated by the French hotel group Accor under a 50-year management agreement.
The Novotel Canberra was sounded out by AXA for being one of the top performing hotels in the city's business district, set to benefit further from the delivery of the new light rail terminal immediately opposite the hotel's entrance in early 2019.
Kumar Kalyanakumar, head of Australia, at AXA IM Real Assets, said the Olympic Park transaction presents a rare opportunity to invest in a portfolio of high quality and well located hotels.
“While these assets already offer strong fundamentals in their own right, they are also set to benefit greatly from a number of value-adding initiatives we have earmarked which will be further enhanced by a forecast growth in tourism and a number of transport infrastructure improvements in Canberra and Western Sydney.”
The investment giant has $126 billion in assets under management, manages a $3.7 billion portfolio of hotels across the globe on behalf of its clients.
AXA’s local operation includes Melbourne’s landmark 101 Collins Street building, a stake in Brisbane’s $1.6 billion Indooroopilly Shopping Centre and towers in Sydney.