Major infrastructure and property development projects will create significant demand in the Perth hotel sector - benefiting existing hotels and new projects - according to a new market review from CBRE .
Major projects, including Elizabeth Quay, City Link, Cathedral Precinct, Burswood Stadium and the $750 million upgrade of Perth’s Domestic and International Airports, are among those highlighted in the CBRE Hotels review, which calls into question recent speculation about a potential surplus of hotel rooms in Perth.
CBRE Hotels Senior Director David Kennedy said the level of current and proposed development activity would create demand that had not seen before in the Perth hotel market, to the benefit of existing hotels as well as new room supply.
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“This progressive development will combine to create Perth as a true international city and encourage both tourism and corporate activity - but only if new room supply occurs,” Mr Kennedy noted.
“It’s not that long ago that the Perth Convention and Exhibition Centre suffered from lost conventions and conferences because of our room shortage. Perth was also lucky to host CHOGM in recent times, with visitors for this conference forced to stay as far away as Mandurah and The Vines and Joondalup Country Clubs, up to 70km from the CBD.”
Recent industry reports have focused on the potential for over 2,000 short stay hotel rooms to be delivered to the Perth market by 2018.
However, Mr Kennedy said this did not represent a glut in light of the significant infrastructure and property developments underway or in the pipeline, adding that consideration must also be given to the different levels of accommodation to be produced in the city.
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He added that Perth’s economy - while subject to a series of peaks and troughs over time - had been a growth story, on a median basis, in the past decade.
“While the downturn in the mining sector has clearly impacted Perth, economists are predicting better times within two years. Much of the hotel product under construction or in the pipeline will not be completed for three years, which will be perfect timing for the next wave of demand,” Mr Kennedy said.
CBRE’s review highlights a series of major infrastructure and development projects in Perth, including:
Elizabeth Quay, an MRA project of $2.6 billion including retail, permanent residential, luxury hotels and commercial offices. Recent commitments include Chevron for offices and Far East with a Ritz Carlton Hotel and mixed use development.
City Link, a 13.5ha land parcel over the Perth railway line connecting Northbridge to the city which already includes the $360 million 15,500 seat Perth Arena and four major office buildings in Kings Square to be completed at the end of this year, plus a hotel site which will be developed by the Minor Group.
Cathedral Precinct, this includes the heritage St George Cathedral, Bishop House, extensive basement car parking with public open space above, the new City of Perth Library, the adjoining multi-storey office tower committed to the State Government and the Treasury building, which is being finalised as a 6 star, 48 room hotel.
Burswood Stadium, construction has commenced on the new Perth Stadium which will be a major tourism attraction in Perth with a 60,000 seat stadium to be completed in 2018.
The Treasury Hotel in the Cathedral Precinct
The Ritz Carlton on Elizabeth Quay
The Westin Hotel in the Fire Brigade Site
The Burswood Crown Tower Hotel
