Brookfield Asset Management is honing in on Brisbane’s limited hotel market, acquiring a tower in Fortitude Valley for around $90 million.
The Canadian-based multinational is expected to close on the Hotel X deal this month with Pointcorp Development Group, who completed the 146-key Brisbane hotel in 2021.
The River City is believed to be facing a 4000-room shortfall in the luxury segment within a decade based on the pipeline of already approved or under-construction properties in the sub-sector.
Brookfield co-head of Australia real estate Ruban Kaneshamoorthy said strong tailwinds for the sector ahead of the 2032 Olympics and with a lack of future supply had solidified the decision to buy.
“With the highest tourism expenditure nationally and its population forecast to grow 40 per cent during the next 25 years, there is a long runway for growth,” Kaneshamoorthy said.
“Brisbane’s hotel market … is expected to drive significant revenue growth in the medium term.”
Kaneshamoorthy said hospitality was a growing focus for them in the Asia Pacific driven by reduced supply given increased borrowing and construction costs.
CBRE Hotels national director Wayne Bunz said the sale had been brokered off-market with Hayley Manvell.
“The sale of Hotel X represented a landmark transaction in the Brisbane hotel market, building upon a string of high-profile hotel sales and reinforcing [the] city’s position as a hotspot for hotel investment,” Bunz said.
“This transaction is not only a testament to the quality of the asset but also to the strength of Brisbane’s hospitality sector, which is underpinned by rising tourism numbers and a strong economic trajectory.”
Ark Capital Partners acted for Brookfield to facilitate the transaction, which was expected to be the first of many such acquisitions for the Canadian group.
Launched globally in 2021, Hotel X Brisbane, Vignette Collection was IHG Hotels & Resorts first collection brand.
The building includes a rooftop bar and pool, ground floor restaurant, 1438sq m of leased office space, a fitness centre and conferencing space on its site at 458 Brunswick Street, about 1.5km north-east of the CBD.
Developers are eyeing predicted hotel undersupply in the River with several project moving ahead.
This includes a second hotel tower proposed to join with the Novotel Brisbane South Bank revealed in October, while IHG Hotels and Resorts plans to open its first Kimpton Hotel in Brisbane in 2028 as part of Kokoda Property’s $1.5-billion riverfront development at Teneriffe.
And construction boss Brett Walker is also planning a short-term accommodation development to be operated by Quest Apartment Hotels next to one of Brisbane’s oldest pubs.
