06 Jun 2023
Words Kelli Crouch, 312872 RLA Informer 106

South Australia

When I took on the challenge of driving ResortBrokers’ expansion into South Australia in 2017, I could see the huge potential for growth in my home state. Six years on, I still do.

Despite a patchy national economic recovery from the pandemic, the SA division of ResortBrokers has posted our strongest financial year yet. My confidence in the potential of this great state continues to be sky high and 2023 is shaping up to be one of our biggest years on record. 

There are several reasons why I’ve never been more upbeat. Over the peak holiday period just gone, South Australian operators enjoyed an incredible run of trade. This is only set to continue. With overseas travel more expensive for Australians on account of our weaker dollar, domestic travel will remain strong. 

Tourist numbers everywhere took a major hit during the pandemic, but the latest economic figures released in December 2022 by the South Australian Tourist Commission show domestic expenditure in our state was $7 billion, which is up 2 per cent on the previous high of $6.9 billion in December 2019 when the last report was published just prior to the lockdowns. Victoria, and in particular Melburnians, continue their love affair with SA, comprising almost half the number of our interstate visitors and contributing handsomely to day trip expenditure which was up 2 per cent to $1.7 billion. We’re also seeing healthy visitor numbers from NSW (26 per cent) and Queensland (13 per cent).

It’s no wonder I’m continuing to see strong buyer enquires. There’s enormous interest from interstate purchasers, particularly for regional stock. These investors know, as I do, that there’s still so much untapped potential in the South Australian accommodation sector.

Combine that with a large number of properties operating as freehold going concerns compared to the eastern states, and with no stamp duty payable on commercial properties, South Australia is a fantastic place to invest. 

Our capital, Adelaide, is leading the charge. The CBD is alive again with a return to high occupancy and improved tariffs almost back to prepandemic levels. With a full event schedule returning to Adelaide, the second quarter will be an exciting one. Our annual showcase is Adelaide Fringe, which has a longstanding reputation as one of the best arts festivals in the world, second only to Edinburgh. It’s been a fixture since 1960 and I’ve seen it blossom over the years into the world-class festival it is today. It kicks off a chock-a-block couple of months that includes the Adelaide Festival of Arts, Adelaide Writers’ Week and the four-day world music festival WOMADelaide.

You can well see why we locals call it “Mad March.” The city is positively buzzing with activity during this time. And that’s just one month in a year packed with regular events including our annual sporting calendar which includes the Adelaide 500 motor race, the Tour Down Under cycling race, as well as our regular footy and cricket seasons. Adelaide’s pride is our beautiful Adelaide Oval, one of the loveliest sporting grounds in the world and up there with the historic Lords in London for cricketing splendour.

On the hotel front, little old Adelaide is fast becoming big, brash and new Adelaide. Our capital has now well and truly outgrown its cliche of just being “the city of churches”. On King William St, our beautiful old GPO building is being transformed before our eyes into the $200 million 16-storey Marriot hotel, the first ever in our state and a real show of confidence in Adelaide as a tourist destination by one of the world’s most recognisable marquee hotel brands. Meanwhile, another global brand TRYP by Wyndham is close to opening its new $50 million hotel on Pulteney St. Yet another luxury opening slated to open soon is the 18-storey Vibe Hotel on Flinders St and its neighbouring apartments building ONE. The complex has a “sky bridge pool” that allows guests to swim between buildings. How cool is that? 

Another sign of our state capital’s rising star in the global accommodation industry is its hosting of Tourism Australia’s signature incentive showcase Dreamtime this November. This is Dreamtime’s first event in Adelaide and its first since Covid. Also, the Australasian Hotel Industry Conference and Exhibition (AHICE) will return to Adelaide for a third consecutive year this May. Outside the US, AHICE is the largest hotel industry conference in the world and for Adelaide to be chosen as host three years in a row is another feather in its cap. ResortBrokers has a proud history with AHICE, at which our Managing Director Trudy Crooks has presented at past conferences. 

Driving the state-wide accommodation market upward is simply great quality stock with strong returns. The most popular asset classes are definitely freehold going concerns, particularly larger scale motels and caravan parks.

I’m also seeing strong enquiries on larger leaseholds. A recent major sale for us was the Wallaroo Beachfront Caravan Park, a passive investment with a very heathy sub-7 per cent return.

We received several competitive offers in the first five days of going to market — an incredible response in such a short time. I wasn’t surprised at all this asset was snapped up. The property itself is exceptional and the location is perfect. Wallaroo is about two hours’ drive from Adelaide and is one of the most popular coastal spots on the Yorke Peninsula. 

I’ve been there countless times and always find something new to do or see. As I said, it comes down to great quality stock in superb locations — it’s a pattern I’m seeing repeated right across the state whether it’s in the major urban centres or the regions. 

All in all, I’ve never been more excited about South Australia. This financial year alone, I’ve sold and settled 18properties, including two record sales with a combined value of $4.75 million. Six years on from when I first took on the challenge of growing ResortBrokers’ market here, I remain incredibly upbeat. If SA’s accommodation sector can emerge this strong in just its first year from the pandemic, then watch out — the next six years are going to be our best yet. END