Australia’s regional motel sector—long dominated by mum-and-dad owner-operators—is becoming more institutional, with bigger groups chasing portfolios and scale.

ResortBrokers managing director Trudy Crooks said the market was becoming more commercialised as funds pushed deeper into the space and existing portfolios moved closer to being snapped up.

Crooks said ResortBrokers, a specialist accommodation brokerage settling about 200 to 250 properties a year across leasehold, strata and freehold assets, was already seeing the shift gather pace.

“I definitely think it’s becoming more commercialised,” Crooks said at The Urban Developer’s Hotel Summit in Sydney. “We’ve been seeing it for the last couple of years, big funds wanting to get into the space and getting scale.”

She said some operators already held portfolios likely to attract larger buyers.

“There are a couple of operators that have some really great portfolios that I think will be gobbled up,” Crooks said. “It’s one of the few industries that hasn’t been totally amalgamated yet, but I think we’re moments away from that happening, which is exciting.”

Crooks said motels were starting to follow the path already seen in caravan parks and childcare, with larger players chasing scale through portfolio acquisitions.

Pricing is also pushing the sector further away from its small-business roots.

Crooks pointed to ResortBrokers’ $19.5-million sale of the 44-room Country Motel Ipswich (pictured at top) as evidence values had moved well beyond traditional mum-and-dad territory.

▲ Adam Di Marco leads the hotel investment lifecycle panel with Ivy Cheng, Ashish Bhattacharya and Trudy Crooks.

“The prices are incredible, though,” she said. “Certainly not little mum-and-dad businesses in regards to price.”

Crooks said buyer depth remained strong where earnings were sustainable.

“There’s so much capital coming into space,” she said. “There’s multi-buyers for every asset class that we’re selling, as long as the net profit’s sustainable.”

She described current conditions as “a perfect storm really”, pointing to population growth, constrained supply and a lack of beds.

CapitalLand investment and business developer Ivy Cheng gave the broader institutional backdrop.

Cheng said the Singapore-based group held just under $2 billion of lodging and living assets in Australia and still saw “a strong structural investment thesis” in the sector because of demographic tailwinds.

Lockton head of real estate and construction Ashish Bhattacharya said buyers were also taking a more forensic view of risk as capital moved further into accommodation.

He said due diligence needed to look closely at building age, hold period, climate exposure and catastrophe risk, including flood, hail and cyclone exposure in places such as North Queensland.

Motels

Hotel & Hospitality

06 Apr 26

Regional Motels Draw Capital as Development Scale Grows

Vanessa Croll