22 Apr 2020
Words Scott Sawyer Sunshine Coast Daily

No last resort as $11m in deals done despite virus

THE coronavirus-driven business downturn hasn't dampened all spirits yet, with accommodation sales soaring ahead of an expected domestic tourism boom.

More than $11 million worth of accommodation sales were recorded in the region since the pandemic took hold.

It was understood experienced operators were making moves, with a surge in domestic tourism expected in 2021-22.

Resort Brokers had locked down four major deal deals since March 1, which included the sale of management rights for five-star Rumba Beach Resort at Caloundra with 74 units, as well as Langley Park Holiday Apartments and off-the-plan development The Rhythm at Maroochydore.

The sale of the passive investment to Golden Beach Motor Inn, also in Caloundra, rounded out the quartet of deals.

Resort Brokers Sunshine Coast senior broker Glenn Millar said the activity had surprised him given the circumstances.

He said he had another four deals under contract at present, settling between May and September, for management rights in complexes in Noosa, Kings Beach, Parrearra and Birtinya.

He said of those four, three were permanent complexes with long-term leasing, while the other was a "very large" holiday complex.

Mr Millar, who had been in the business for 15 years on the Coast, said the government handouts were helping many who had been thinking of selling to hang on and hold out heading to market until the downturn eased.

"We had no idea how things were going to pan out once the shutdowns and travel bans kicked in, but within a few weeks we started getting inquiries from experienced operators and opportunistic buyers," he said.

"The travel bans and restrictions has naturally led to an increased interest in permanent complexes, as these often have tenants on long-term leases, but I have one large holiday complex under contract.

"The experienced operators know that the Sunshine Coast is a solid long-term play and they're looking for value, knowing that people will start travelling again. It's just a matter of when."

Mr Millar worked through the global financial crisis, and he tipped the industry would follow a similar pattern.

"In the short term, deals are still being done but, for all intents and purposes, things are a little bit on hold. However, once people start moving again and the doors are open, I think we'll see a flurry of vendors looking to sell," Mr Millar said.

"For buyers who are in a good position with cash available then the next few months will be very interesting, especially in about four to five months."

Mr Millar says the biggest challenge now facing the accommodation industry is how valuers will respond to the coronavirus crisis in their assessment of the loss of income incurred by operators during the shutdown period.

"What their criteria will be will go a long way to determining how quickly we can return to pre-CV volumes of transactions. Liquidity is key and until this is over, every deal will need to be looked at individually and on its own merits."