Brisbane, 5 June 2013- A fund managed by Blue Sky Residential Asset Managers has acquired the Coral Cay Resort Motor Inn Mackay.
Wayne Bunz and Neil Scanlan of CBRE Hotels negotiated the sale of the north Queensland property - one of the only large scale accommodation facilities to be offered for sale in Mackay in the past decade.
Mr Scanlan said the freehold sale signaled continued confidence in the region.
“The sale represents the largest single accommodation transaction in Mackay and highlights ongoing investor confidence in the region’s future growth prospects,” Mr Scanlan said.
“While there has been considerable press about a softening in accommodation markets associated with mining regions, there is still great significant investor interest in quality assets in strong regional cities.”
Blue Sky Residential Asset Managers operates the residential income asset division of ASX- listed alternative asset manager Blue Sky Alternative Investments Limited. It has a mandate to acquire residential income assets in high growth areas.
Under the sale agreement for Coral Cay the existing lessee will remain in place. Settlement will occur in July, delivering Blue Sky Residential Asset Managers its first investment in Mackay.
David Laverty, Managing Director of Blue Sky Residential Asset Managers said that Blue Sky Residential Asset Managers’ focus is on acquiring high quality properties that have exceptional tenants in place.
“We feel that the Coray Cay Resort Motor Inn is the perfect blend of a fully refurbished freehold property with a tenant who is committed to the region and has proven itself to be an outstanding operator throughout a number of economic environments,” Mr Laverty said.
The original Coral Cay was developed eight years ago and was integrated with the adjoining property in 2007. Following the merging of the two properties, the total revenue has grown materially and is set to reach $5.2 million in 2012/13.
Construction of 18 new units was completed in 2009 and a full refurbishment of the original property was completed in January 2013.
The 82 room, 4.5 star motor inn features conferencing facilities and one of Mackay’s best restaurants. The property also includes a tropical entertainment area complete with swimming pool, outdoor spa and barbecue area.
A three-bedroom, two-bathroom Managers residence is also located on the 9,148sqm freehold site.
Mr Scanlan said strong accommodation demand and limited new supply was bolstering the fortunes of the Mackay hotel sector.
Growth in the region has been accelerated by the mining industry but - unlike other resource-reliant centres - the Mackay market has been particularly robust given its non-reliance on any one industry.
“Mackay is one of the only areas that is non-reliant on one single industry but has a balance that will see growth continue for many years,” Mr Scanlan said.
“The region’s growth is fuelled by the boom in the mining and gas industries, resurgence in agribusiness, growth in tourism and an emerging marine sector.Recent announcements, including plans to further develop the Galilee basin to Abbot Point coal terminal rail connection, have provided an additional boost to confidence in the future of this dynamic regional centre.”
A recent CBRE Hotels review highlights that Mackay hosts much of the engineering, manufacturing and mining services industries supporting the regional economy. This has underpinned the strong performance of the accommodation sector, with 2012 seeing a total of 2.213 million visitor nights, up 10% from 2011.
At the same time, Mackay has witnessed considerable growth in average occupancy levels which have risen from 66% in 2010 to 77% in 2012. Passenger movements at Mackay Airport currently exceed 1 million in 2012 which indicates a 14.6%, ten-year growth and is forecast to grow by a further 17.3% over the next ten ears.
The town is known as the “sugar capital” of Australia, with the sugar industry injecting $1.5 billion annually to the local economy. It is also recognised as the gateway to the Bowen and Galilee mining and gas reserves which is increasingly taking on more long term national and international mining commitments.
Against this backdrop, Mr Scanlan said the local tourism market was seeing more growth and this had underpinning buyer interest in available investment opportunities such as the Coral Cay Resort.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website atwww.cbre.com.au.