Publications

- May 1, 2019: Vol. 11, Number 5

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Premium destination: Australian hotels offer attractive risk-adjusted total returns relative to other traditional property sectors

by Kumar Kalyanakumar

The Australian hotel market is considered ripe for continued growth on the back of a strong tourism outlook and, as such, is likely to continue to be a hunting ground for international and domestic institutional investors looking to capitalise on healthy returns relative to competing real estate sectors.

The landscape for hotel investment in Australia has evolved significantly over the past 15 years, and it is now regarded as an institutional asset class offering investors attractive long-term returns. Hotels are now the largest alternative investment sector in Australia. AXA Investment Managers – Real Assets is an active participant in the sector, and our conviction is evidenced by our recent acquisition of an A$330 million (US$235 million) diversified hotel portfolio focused primarily on Australia’s eastern seaboard (see photos).

The expansion of the hotel market in Australia has led to the development of more than 27,000 new accommodation rooms over the past eig

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