Informer sept 2014

INFORMER Being your own Boss When it is time to mind your own business

resortbrokers.com.au

No. 76 | September 2014

Australia’s No.1 tourism & business

inside...

HOTEL GROUP FEATURE: WYNDHAM

10

THE REALITY OF STANDARD MODULES 20 STATE OF THE MARKET

23

NEW KIDS ON THE BLOCK

30

ACCOMMODATING PHASES IN MINING

39

BEING YOUR OWN BOSS

40

MIKE O'CONNOR'S COLUMN

46

MANY FACES - TONY RYAN

50

TAKING THE LEAP

58

RELIEF MANAGERS 62 INDUSTRY SPECIALISTS

63

EXCLUSIVE LISTINGS 64 MEET OUR TEAM

66

Get-up-and-go getters Ian Crooks MANAGING DIRECTOR

FEATURE: Want to call the shots yourself? Take charge of your future? Maybe you need a new challenge. Or perhaps you can no longer rely on the security of paid employment. For whatever reason, there’s a lot to be said for being your own boss. Meet some go-getters who made the move to buy themselves a job they love. More on page 40.

S

elf-reliance and self-belief are marvellous attributes, especially when it comes to securing your future happiness and prosperity.

It seems to me, Australians are still unsure about the immediate future. People aren’t nearly as confident as when the Abbot government first took over. I suspect we can only blame the situation in the Senate, with its bunch of unpredictable newcomers.

In hindsight, the Gillard government probably made a reasonable fist of getting things done, considering they were

operating in a minority position. Now we have a majority government, it should be full steam ahead. But we’re still stalled.

That’s why this issue is packed with go-getters – people with get-up-and-go.

They’re not waiting around for governments to act, or relying on others to get them where they want to go. They’re making their own futures. We look at what drives people to be their own boss, and meet four enthusiastic operators who’ve bought themselves a job.

Our regular features, profiling industry identities and operators, also focus on some live wires. Read about Wyndham’s impressive growth, driven by CEO Barry Robinson, and high-flying industry advisor Tony Ryan’s lifelong passion for the hotel business.

One of Tony’s pet subjects is the importance of ‘industry engagement’, of contributing to the sector that provides us with our livelihoods. We agree. Resort Brokers Australia is now a Gold Sponsor of the Accommodation Association of Australia (AAA) - formally HMAA. This national body provides a vital unified voice for the tourism accommodation sector, in particular representing our interests to government decision-makers. If you aren’t yet a member, we’d urge you to join the 2000+ properties already on board with the AAA. Around the regions, various trends are

emerging. In this edition, we look at the upside of a mining slowdown, discover a new energy shining through on the Gold Coast, and give you the lowdown on the Top End. I’ve spent some time in Darwin lately, a real powerhouse region, and we know of some new offerings coming on line there.

Elsewhere around the country there is excitement about new international hotels being built, and the strength of Asian investment.

Interestingly, there’s more and more interest from both Asian and Australian hoteliers in the concept of management rights, because it allows them to control more rooms for a lower cost. It was one of the talking points at the recent HotelsWorld conference.

Speaking of conferences, it’s now that season for hotel and motel groups. Two from our team have just been to the Best Western conference in Hobart, and Trudy and I are off to the Choice gathering in Auckland. Next month we’ll be joining Quest, for whom we are preferred agents.

So, we are busier than ever here. In fact, this issue introduces three new brokers joining us to keep up with demand.

Welcome to Des, Andrew and Liz (see page 30). Until next time….

Got any comments? Get in touch: carlacook@resortbrokers.com.au or PO Box 5004, West End QLD 4101 resortbrokers.com.au

3

MR

A rare opportunity to enjoy the ultimate lifestyle and reap huge rewards!

Enjoy the ultimate lifestyle in this prime property, so close to the beach you can nearly touch the water. This is the only beachfront offering available in tightly held Rainbow Bay, an exclusive enclave located immediately east of Coolangatta, renowned for its family friendly, seaside village atmosphere and its safe, fully patrolled beach.

Every apartment has been beautifully refurbished and enjoys the warming winter sun and sensational ocean views from their prime north facing position.

This property is very easy to run as there is new office equipment and exceptional streamlined business operational systems in place, the grounds work is minimal and office hours are flexible. What more could you want?

Boasting 83% occupancy and 70% forward bookings for the next 12 months, this business enjoys regular, repeat clientele year in, year out and is an absolute magnet for the savvy purchaser.

If you are looking for a sound investment in an unbeatable location, you simply must come and view this property.

• Property runs at 83% occupancy • 70% forward bookings with deposits paid. These are direct bookings (i.e. no short stay websites/commissions involved) • Recently rated #2 for accommodation on Trip Advisor • Located on Queensland’s award - winning cleanest beach!

• 45 units - 36 in the letting pool • Luxurious, fully renovated manager's unit with ocean views • A short flat walk to shops, Twin Towns Services Club and Coolangatta • Low risk, high netting property in bulletproof beachfront position

Nett: $354,537

Price: $2,640,000 resortbrokers.com.au/management-rights-for-sale/MR003127

Carolyn Griffith Broker Mobile. +61 419 675 429 Email. carolyngriffith@resortbrokers.com.au Headoffice. 07 3878 3999 4

resortbrokers.com.au

SHOULD'VE GONE TO SLEEPMAKER...

Recent surveys show over 70% of guests rated a Hotel Bed as the single most important item in a hotel room... keep your guests happy and invest in a great Hotel bed from the leaders in commercial bedding.

We sell Sleep!

Call us on 1800 425 903 or email: commercial@sleepmaker.com.au www.sleepmaker.com.au

MR

Excellent building, excellent location, excellent business This property presents an opportunity to increase profitability by a couple being involved in the management of the business.

Live the ultimate lifestyle in beautiful Redcliffe in a magnificent penthouse and enjoy all that is on offer in this bay side location.

Enjoy the increasing occupancies of the area generated by Redcliffe’s annual events including the Festival of Sails, the Redcliffe Show, the start of The Brisbane to Gladstone Yacht Race and the Moreton Bay Boat Club’s yacht races.

As well as boating events there are the Cultural Centre’s activities including the annual ballet production.

This property is essentially a holiday complex , with 26 holiday units and 2 permanents. There are 33 units in the building with 28 units in the letting pool.

• Increasing occupancy/ increasing tourist trade/ increasing net • Top class building close to the shore of Moreton Bay •E xcellent top floor manager's residence with views over Moreton Bay • Situated in the high growth corridor of South East Queensland • Ample secure basement parking • Beautiful pool area for tenants enjoyment • Boardroom for hire that seats 25 in theatre style • Plenty of upside for a hands on couple

The manager’s residence is the top floor penthouse and has all the attributes that you would expect in a high quality residence.

Nett: $256,854

The location of Redcliffe and Scarborough on Moreton Bay has been popular as an idyllic place to live and to holiday dating back to the early settlement.

Price: $2,050,000 resortbrokers.com.au/management-rights-for-sale/MR00306

Neville Littleton Broker Mobile. +61 407 727 194 Email. nevillelittleton@resortbrokers.com.au Headoffice office. 07 3878 3999 6

resortbrokers.com.au

Exclusive MR

Blink and you will miss this near new management rights in Coolum Resort Brokers Australia have been appointed as exclusive marketing agents for the sale of the management rights and associated real estate of Coolum Seaside Resort.

Prior to 2011 the complex was held under a single ownership and operated as a single owner resort. Since then units have been progressively sold to individual owners resulting in the complex being strata titled and new caretaking and letting agreements being granted. The caretaking and letting agreements have 23 years remaining on the term.

The complex features four buildings with a range of swimming options including a lap pool, heated spas, a gymnasium and a full size tennis court.

There is a massive opportunity for an incoming manager to increase returns as the complex is currently trading at 45% compared with an average in Coolum of 62%. Come in and market this property to the corporate market and reap the rewards.

• Solid body corporate remuneration backed up by maintenance program in place for next seven years • Long accommodation module agreements • New website, signage, garden upgrade and complete repaint of complex • Spacious three bedroom, two bathroom manager's residence

Nett: $327,373

Situated above the gymnasium is a business lounge with a boardroom table and refreshment preparation facilities which doubles as a guest library. Guests have access to the business lounge as an alternate workspace or exclusive setting for client meetings. It features a boardroom table, tea and coffee facilities, computer and printing services as well as daily newspapers available on request.

resortbrokers.com.au/management-rights-for-sale/MR003284

Glenn Millar

Tyler Millar

Broker

Broker

Price: $2,275,000

Mobile. +61 412 277 804

Mobile. +61 411 271 761

Email. glennmillar@resortbrokers.com.au

Email. tylermillar@resortbrokers.com.au

Headoffice office. 07 3878 3999

Headoffice. 07 3878 3999 resortbrokers.com.au

7

FH

A 3 star gem - the perfect freehold motel for newcomers to the industry With a recent refurbishment completed, all the hard work has been done. This freehold motel offers newcomers to the industry the perfect proposition to cut their teeth on.

This motel is ideal for two couples with two units; one a three bedroom residence and the other a large one bedroom selfcontained upper level unit

Located in thriving Northern NSW, this property has maximum exposure with three street frontage. Ballina, a city of some 44,000 residents, has recently re-branded itself as a bustling holiday town close to superb beaches. Located at the mouth of the Richmond River, Ballina is home of the iconic Big Prawn tourist attraction.

• Would suit beginners as the refurbishment is complete and hard work has been done • Prominent commercial zoned, three street frontage site • Rapidly expanding regional holiday and commercial city • Business upside available through internet marketing / positioning • Highly sought after lifestyle location and freehold business • Property inspections are by appointment only

This property would benefit from online marketing. Come in and promote this property on the internet and cash in on the substantial upside potential.

It is not often we have a desirable freehold proposition like this located in one of the great beach lifestyle towns.

Nett: $177,735

The property is frequented by holiday makers as well as reps travelling through looking for a relaxed place to stop and rest.

Price: $1,295,000 resortbrokers.com.au/motels-for-sale/FH003221

Ian Dore Broker Mobile. +61 412 752 238 Email. iandore@resortbrokers.com.au Headoffice. 07 3878 3999 8

resortbrokers.com.au

Exclusive LH

An opportunity to purchase an iconic Brisbane management rights in an desirable location Resort Broker Australia is delighted to offer this iconic management rights in Toowong. Constructed in 2004, this property is a modern, medium-rise apartment complex with 90 units built over 11 residential levels. The apartments boast stunning uninterrupted views of the Brisbane River and city, or views across to the park next door.

The current operator has owned this management rights for eight years. The building still presents as new and is immaculately presented. The exterior of the building has just been painted and painting of the interior is underway. All the hardwork has been done!

The attached office/reception, large basement storage and car space is on title.

All apartments can be let on either a short term or permanent basis at the discretion of the manager. Currently there are 19 furnished apartments being let on a permanent basis that can be converted to short term letting at any time – this is a real opportunity for the right purchaser.

Come on in and reap the rewards that this fantastic offering has to offer!

The building has historically done better than it has over the past twelve month period. This downturn can directly be attributed to personal reasons. It is for these reasons that this prime business is being offered for sale for the first time in eight years. The committee is a supportive and harmonious one.

The manager's unit comprises three bedrooms, two bathrooms, lounge/dining room, kitchen, large study, laundry and patio.

Nett: $695,000

Price: $4,900,000 resortbrokers.com.au/management-rights-for-sale/MR003324

Tim Crooks Broker Mobile. +61 422 208 450 Email. timcrooks@resortbrokers.com.au Headoffice. 07 3878 3999 resortbrokers.com.au

9

EDITORIAL

Service

you can count on to drive growth IN THIS SERIES OF ARTICLES, WE PROFILE LEADING SHORT-TERM ACCOMMODATION OPERATORS – THEIR ORIGINS, GROWTH, MARKET POSITION, AND FUTURE PLANS.

The opening of Australia’s first TRYP by Wyndham hotel in Brisbane this month marks another milestone for a company with a remarkable growth record. From running a single timeshare resort on the Gold Coast, to becoming a fully integrated owner, operator and franchisor of hotels and resorts, Wyndham has risen to be a major player in the Asia-Pacific accommodation sector.

N

ot so long ago, the Wyndham name was relatively unfamiliar in the Australian holiday landscape. Yet, elsewhere around the globe, it was an industry giant.

Wyndham Worldwide Corporation (NYSE: WYN) is one of the world’s most diverse hospitality enterprises. Its Wyndham Hotel Group claims the title as the world’s largest hotel company, with 7,540 hotels and 650,200 rooms in 71 countries, under 15 hotel brands.

Wyndham made its first foray into Australia as recently as 2000 with a timeshare business called Trendwest, opening a timeshare resort at Kirra Beach on the Gold Coast. Then, in what has proved to be a pivotal move for the company, it appointed a new CEO in 2003.

New Zealand-born Barry Robinson has spent most of his life in the hospitality industry. He rose to the position of hotel general manager at an early age, and went on to hold senior executive roles in Asia and Australia with Swissötel Worldwide Partner Hotels and Choice Hotels International.

Robinson set about restructuring and refocusing Trendwest. As CEO and managing director, he rebranded it to Wyndham Vacation Resorts Asia Pacific in 2007. The business has achieved steady growth ever since – double digit growth year on year, in fact – even through the global financial crisis.

Wyndham Vacation Resorts Asia Pacific now has 26 vacation ownership resorts in its vacation club collection in Australia, New Zealand and Fiji, with more than 49,000 vacation owners in its WorldMark South Pacific Club by Wyndham.

In 2009, Wyndham Hotel Group began to look to the South Pacific for expansion opportunities. And, who better to steer that growth than Barry Robinson, the man who was already kicking goals for their regional sister company?

10

resortbrokers.com.au

Wyndham on William Ayers Rock Resort, Ayers Rock in Melbourne

For the last five years, as managing director of Wyndham Hotel Group in the South Pacific, Robinson has also been the driving force behind many enhanced resort developments and new acquisitions. The company has developed close to $900 million worth of assets, which are now managed by Wyndham.

Wyndham’s South Pacific portfolio now includes some 40 managed or franchised hotels and resorts under the Wyndham, Ramada and TRYP by Wyndham hotel brands. Some are fully managed, others are franchised properties, and some are mixed-used, providing accommodation to timeshare owners, resort guests and strata title apartment owners.

In Australia, Wyndham’s hotels so far number 28, spread across the nation from Tasmania, to Western Australia to tropical north Queensland. About 1000 apartments / hotel rooms are owned by the company and close to 2000 are managed.

Alongside the successful business restructure he’s overseen, Robinson counts the shift in company culture to a greater service focus as one of his most satisfying achievements. At the heart of his approach has always been a core belief that exceptional service and successful business go hand-in-hand.

That emphasis is reflected in Wyndham’s proudly declared ‘Count on me!’ service promise, and its stated mission to “make holiday dreams come true”.

“Wyndham’s growing footprint in Australia is well aligned with the increased global demand we are seeing for quality accommodation to be coupled with exceptional service,” Robinson said.

Brands targeted for growth across the South Pacific include Wyndham Hotels and Resorts, Ramada, TRYP by Wyndham, Planet Hollywood, and Days Inn. Two new hotel openings before the end of 2014 headline another year of record-breaking growth for the company. The first, this month in Brisbane’s Fortitude Valley, will debut the TRYP brand in Australia.

“TRYP is a very different kind of development to what we have done before,” Robinson says of the hip new hotel concept.

“The new generation of travellers is looking for uniquely different and memorable hotel experiences and we have certainly delivered that with Australia’s first TRYP hotel.”

TRYP Fortitude Valley Hotel is a boutique, experiential, urban-styled product featuring striking art and murals by world famous street artists Rone, Breastman, Numskull and Fintan Magee. It boasts a ground floor restaurant, Chur, and Brisbane’s newest rooftop bar, UP, both run by acclaimed chef Warren Turnbull.

In November, Wyndham on William, a 531 apartment high-rise property, is set to open its doors in the Melbourne CBD. Expansion of the company’s growing

Barry Robinson Wyndham CEO

portfolio is being driven from Wyndham’s Gold Coast headquarters where around 700 of its 2,000 staff are based. Robinson sees his dual role at the helm of both the vacation ownership and hotel businesses as a distinct advantage in the marketplace. ”Not many competitors on a global brand basis run a mixed-use product the way we do,” he says. “We are getting real synergies and alignment between service philosophies. There is very much one voice and one vision, which is focused around service and hospitality, both internally and externally.

“With our globally-recognised brands, service promise, strong sales platform, and leading loyalty program, we are well positioned to help our partners grow and meet the needs of every kind of traveller.”

Partnership opportunities with Wyndham span the full range of operational models. Their hotel development team provides development support services and access to local market knowledge, operational support, proven marketing methods, and powerful revenue management tools.

Wyndham franchise opportunities focus

on strategic growth, powered by strong marketing programs, brand awareness, technical services, a global reservations system, and comprehensive training initiatives.

The company’s loyalty program, Wyndham Rewards, is the largest in the world based on number of participating hotels. The only hotel loyalty program to offer members guaranteed rewards after one qualified stay, it currently has over 9.7 million members.

Since 2000, Wyndham has shaped and dominated Australia’s timeshare industry.

Now its hotel business is making major inroads. In just 14 years, the Wyndham name has earned its place as a respected accommodation sector leader in Australia and the wider region.

Still their sights are firmly set on expansion, with plans to further grow the Wyndham Hotel Group in the South Pacific, and expand the vacation ownership business model into Asia.

In coming months, expect to see another major acquisition announcement from Wyndham. And it won’t be the last. You can count on that.

Tryp by Wyndham in Brisbane resortbrokers.com.au

11

Exclusive LH

This 34 room motel offers a massive return of 45% & is only 2 hours from Sydney The Colonial Motor Inn is an exciting opportunity for a savvy operator to take this 34 room property to the next level. This 3.5 Star AAA rated motel spans over one level and features a fully licensed 60 seat restaurant. The property has the capability of accommodating large groups and bus tours as well as the strong corporate and leisure clientele that frequent the area.

Well situated on 8 acres of spacious parklike grounds, the motel is in prime position on the Great Western Highway. Close to the town of Lithgow, the Colonial Motor Inn is a short stroll to Marrangaroo train station and is in walking distance of the Lithgow Golf Club and City Raceway.

A generous two bedroom fully self-contained managers residence, with direct office access, is neatly presented and yours to call home.

A delightful prospect in beautiful surroundings – an inspection will be sure to impress.

• 34 newly refurbished rooms • Two bedroom fully self-contained residence with direct office access • 3.5 star AAA rated • 45% ROI • Fully licensed 60 seat restaurant • Swimming pool and expansive grounds • Beautiful spacious grounds • Popular licensed bistro

Nett: $230,000

Price: $595,000 resortbrokers.com.au/motels-for-sale/LH003318

Shane Wynhoven Broker Mobile. +61 424 174 592 Email. shanewyhoven@resortbrokers.com.au Sydney office. 02 9904 8224 12

resortbrokers.com.au

Exclusive LH

Substantial leasehold accommodation business in NSW business & infrastructure hub On offer is the leasehold interest of Quest Maitland, an outstanding property constructed and opened in 2007 consisting of 30 x one bedroom and 2 x two bedroom apartments.

In February 2014 a further 10 apartments consisting of 5 x studio and 5 x one bedroom serviced apartments were opened on the site. The business now has a total of 42 apartments and with the introduction of studio apartments occupancies have increased with the full effect yet to be achieved in 2014/15.

Each apartment features a living/dining area, fully equipped kitchens (kitchenettes in studios), laundry facilities, stylish and modern furnishings. Most have private balconies. Property facilities include gym, onsite car parking, wireless broadband and Foxtel.

• Purpose built building developed in two stages 32 apartments 2007 and 10 apartments 2014 • Mixture of studio, one bedroom and two bedroom serviced apartment • Long lease tenure; with 10 x new apartments with 24 years remaining and 32 x apartments with 23 years remaining • Member of Quest Serviced Apartment Group, Australasia’s leading apartment franchisor • Rated No 1 by Trip Advisor

Nett: $307,733

There is opportunity to further develop the business and to maximise the accommodation with the full income effect of the new apartments yet to be seen in the 2014/15 trading figures.

Price: $1,400,000 resortbrokers.com.au/motels-for-sale/LH003267

Jim Chapman Broker Mobile. +61 413 444 782 Email. jimchapman@resortbrokers.com.au Melbourne office. 03 9347 3100 resortbrokers.com.au

13

Exclusive LH

This motel has it all! 34% return, low rent & new 30 year lease On offer is the opportunity to secure the leasehold interest of a large ‘full-service’ motel in the heart of Mount Gambier. This motel is very profitable and shows a solid return of 34%. With a long 30 year lease and below market rent (18%), this property has it all!

The motel is perfectly located on the main road and is a short stroll into the heart of town. It’s a strong corporate performer as it offers the necessary facilities such as bar, restaurant and indoor pool.

Mount Gambier is the largest regional city in South Australia located approximately 450 kilometres south of the capital Adelaide and just 17 kilometres from the Victorian border. It is the major service centre for the Limestone Coast. A thriving progressive community, residents enjoy a quality lifestyle, with city facilities and services, many attractions and a wide range of shopping and entertainment options.

With genuine upside to invest and increase both room rates and profitability, this an opportunity for a savvy investor. With a price tag under $1M, this motel has been priced to sell.

• Big 42 room motel in largest town in South Australia • 30 year lease • Low rent (18% of turnover) • Accommodation, bar, restaurant and conference facilities • Located in the heart of Mount Gambier • Very profitable business with genuine upside • Showing an excellent return of 34%, this motel has been priced to sell • Freehold available

Nett: $337,883

Price: $995,000 resortbrokers.com.au/motels-for-sale/LH003336

Stuart Charles Broker Mobile. +61 458 588 472 Email. stuartcharles@resortbrokers.com.au Melbourne office. 03 9347 3100 14

resortbrokers.com.au

Exclusive MR

The ultimate beach holiday destination for your working lifestyle Located in beautiful Coffs Harbour, New South Wales, Sandcastles Holiday Apartments is truly an amazing opportunity.

This immaculately presented complex, across the road from the beach, in a popular holiday location allows for the perfect work lifestyle combination.

The fully self-contained apartments range from standard to deluxe in finish and inclusions. All have Foxtel and free wireless broadband access.

The vendor is motivated and is prepared to consider offers.

• New agreements for the new managers • Successfully run under current management • 12% ROI achievable as a passive investment • Large family friendly resort pool, spa and spotless BBQ area • Walking distance to shopping precinct, café’s, restaurants, clubs, and pubs • Upside available for hands-on, on-site operator

The property boasts resort style facilities inclusive of a brick cabana with heated spa, sauna and BBQ’s adjacent to the 12m heated swimming pool and children’s wading area.

Nett: $204,312

The managers residence is tastefully decorated and includes two spacious bedrooms and two bathrooms and is located separate to the reception and office.

Price: $1,070,000

Presently there are 30 holiday let apartments (out of 35) in the manager's letting pool, providing a solid income.

resortbrokers.com.au/management-rights-for-sale/MR003116

James Carrick

Ian Dore

Broker

Broker

Mobile. +61 400 664 065

Mobile. +61 412 752 238

Email. jamescarrick@resortbrokers.com.au

Email. iandore@resortbrokers.com.au

Sydney office. 02 9904 8224

Sydney office. 02 9904 8224 resortbrokers.com.au

15

Exclusive LH

Netting a massive $1.8 million under management showing a 30% return on investment Quest Palmerston in the Northern Territory, just 20 minutes south of Darwin, is without doubt one of the best offerings that we have seen in a long time. The 84 keyed hotel is just four years old and is ideally located in the epicentre of this emerging economic hub.

The business is well organised, fully staffed and runs like a well oiled machine. The current owners live off site. The incoming purchaser can follow the same methods and will have an easy care business that will return them in excess of a massive $1.8 million nett profit.

Quest Palmerston services representatives from the military, the INPEX gas project (currently the biggest development in Australia) and corporates visiting the many business precincts surrounding the property. Currently under construction is a brand new $150mil hospital and a shopping centre, which has been touted as 'Darwin’s brand new place to shop and play'. This is all on your door step, boding well for future occupancies.

16

The complex has a separate conference room, gymnasium, outdoor pool, alfresco BBQ area and fully secured underground car parking.

The Quest franchise is now a truly international brand with 150 properties in Australia, New Zealand and Fiji. The well respected operating model is the envy of many hotel companies, with a completely unique structure which offers second to none training and ongoing support.

• Only accommodation in Palmerston • Unique location, close to all amenities • A number of long term accommodation contracts in place • Achieves very high average room rate

Nett: $1,843,332

Price: $5,995,000 resortbrokers.com.au/motels-for-sale/FH003325

Ian Crooks

Trudy Crooks

Broker

Broker

Mobile. +61 411 171 648

Mobile. +61 477 882 210

Email. iancrooks@resortbrokers.com.au

Email. trudycrooks@resortbrokers.com.au

Headoffice. 07 3878 3999

Headoffice. 07 3878 3999

resortbrokers.com.au

Are you buying or selling Caravan Parks, Motels, Management Rights or Hotels?

David Burrough and his team are the most respected legal advisors for those about to buy or sell an accommodation business.

Why not give them a call today?

T: (07) 3220 1144 E: email@hillhouse.com.au

www.hillhouse.com.au

Many thanks to Queensland Tourism for providing the image of Brisbane

Exclusive LH

Rare Brisbane motel lease that offers an opportunity to grown the bottom line Annerley Motor Inn, located in the southern suburbs of Brisbane, is a 3.5 star premium motel only 6kms from Brisbane City with bus services at the doorstep.

This property is a must see, ideal for anyone looking to get into the very secure and lucrative Brisbane accommodation business!

The motel is conveniently located close to Southbank Parklands, Brisbane Convention Centre, ‘Gabba’ Cricket Ground, ANZ stadium and several universities. PA, Greenslopes and Mater hospitals are all within a couple of kilometres.

Accommodation at Annerley Motor Inn suits everyone from the holidaying family to the worker and corporate traveller. Room choices include motel style rooms with or without kitchenettes and one or two bedroom self-contained apartments.

The building is solidly constructed and has a resort like, Queensland feel.

The vendors have been in this motel for two years. There is a real opportunity here to pick up a fantastic business in a fantastic location at the right price. There is only one way this one can go from here, and that is up.

• Long 28.5 year lease • Excellent location / exposure on main road • 27 recently refurbished rooms • Two bed managers residence • No restaurant NB: Property inspections are by appointment only

Nett: $221,000

Price: $875,000 resortbrokers.com.au/motels-for-sale/LH003225

Steve Campbell Broker Mobile. +61 407 220 668 Email. stevecampbell@resortbrokers.com.au Headoffice. 07 3878 3999 18

resortbrokers.com.au

Exclusive LH

Near new serviced apartment complex showing an above market return Showing an above market return (30%) for a Quest property, this is a wonderful opportunity to secure a highly sought after Quest franchise.

At $850,000, it’s an entry level Quest proposition that would suit both a first time operator or experienced motelier.

The property is the market leader in Portland as its rooms are the most modern and its location is in the heart of town.

The lease is long, with 24 years remaining and the rent to revenue percentage is on the low side by industry standards.

• 49 fully self contained apartments and suites • Near new property built in 2011 • Quest Serviced Apartment Group - substantial support systems.

• 4.5 star (self-rated) • Good lease tenure (24 years) and rent structure • Opportunity to increase occupancy • Each apartment is superbly presented, offering quality fittings and spacious living area • Manager's residence with two bedrooms and open plan living • Absolutely nothing to spend

This is truly an outstanding opportunity to secure a business that has grown every year since its opening, but is still yet to fully mature.

Nett: $253,425

Price: $850,000

Portland is situated 361 kilometres west of Melbourne on the Great Ocean Road. It’s a thriving coastal town that is very busy over the summer months and is supported by diverse industries throughout the year.

resortbrokers.com.au/motels-for-sale/LH003115

Jim Chapman

Stuart Charles

Broker

Broker

Mobile. +61 413 444 782

Mobile. +61 458 588 472

Email. jimchapman@resortbrokers.com.au

Email. stuartcharles@resortbrokers.com.au

Melbourne office. 03 9347 3100

Melbourne office. 03 9347 3100 resortbrokers.com.au

19

EDITORIAL

The Realities of

Standard Modules Most people in the management rights industry have an opinion regarding the standard module, whether it be good, bad or indifferent. In this article, we hear thoughts from a leading financier, solicitor and broker, with the aim of providing a sound understanding of the standard module, as well as dispelling the myths that seem to surround it.

Mike Phipps FINANCE PERSPECTIVE

Urban Myths and Standard Modules I was going to call this article ‘The 10 Myths of Finance’ but recent events have caused me focus on Myth Number 1. That is "the banks won't fund standard module 10 year agreements". I am hearing this feedback from potential purchasers, sales agents and existing operators and it simply isn't true. Certainly different banks have different credit policies and within those policies some managers will interpret things differently. This is as it's always been with lender credit guidelines and so far as I can tell, among the traditional management lenders, not much has changed. Unfortunately there are banks out there who advertise their support for the industry while undermining a substantial portion of the market by talking down the opportunities that exist in standard module management rights businesses.

We are currently dealing with a number of clients who have not only been told by various major banks that they can't help with finance but have also been told not to buy a standard module regulated management rights. In the cases we are looking at right now we can place funding on favourable terms but the buyers are understandably spooked by the feedback 20

resortbrokers.com.au

they have had from the so called market experts in finance.

Here's the thing. Some bank credit policies don't fit 10 year agreements and some do. I think its fine for a banker to decline a deal but incredibly unprofessional to suggest that the purchaser should not buy an asset just because of an unimaginative credit policy.

The banks that continue to support the industry via reasonable credit policy will assess a 10 year agreement on the following basis.

• Maximum 70% all up lending against the combined value of the unit and rights • Of the total lending, 80% of the unit value allocated over a maximum term of 25 years with the first 3 years interest only if required • The balance debt over a maximum term of 10 years with interest only sometimes available Essentially these lenders understand that the unit is not going to magically disappear should the agreements wind down to zero after 10 years with no top ups. They also understand that most standard module buildings have historical evidence of top up approvals with instances of agreements being left to come to an end being very rare. Of course, these same banks will lend 80% or more for a residential house purchase to a borrower who certainly doesn't have a guaranteed income for 10 years so they see the risk as being acceptable given standard home lending practice. Makes sense.

The debt servicing test is then applied in terms of capacity to repay the portion of debt notionally secured by the rights over 10 years. If the borrower can demonstrate capacity to repay in full over 9 years then 1 year interest only is possible. If the agreements get topped up then the term of the debt and the interest only period

can be renegotiated. If the borrower has substantial supporting security or additional income such as rent or an ongoing job then these loan terms can be negotiated on even more flexible grounds.

So why the recent negativity in respect of finance for standard module agreements?

Here's a theory. There has been a steady trend of foreign buyers into the management rights industry and many of these buyers are looking at permanent management rights.

Many permanent schemes are regulated under the standard module. The buyers tend to gravitate toward one particular major bank. That bank has an interesting credit policy which takes the agreement term and deducts 3 years, then the debt service calculations are done. Essentially the debt service test is being done over 7 years and that bank treats the entire purchase as a commercial transaction so it's all the debt over 7 years. Virtually no standard module building can meet these guidelines and the deal gets declined. The message this significant buyer segment is getting from the bank is that standard module buildings are risky and best avoided just because they don't stack up against a very odd and uncommercial credit policy.

10 YEARS

standard module

&

&

My suggestion to buyers is to engage someone who can articulate exactly what the banks will do and navigate through the minefield of bizarre credit policies and personal agendas. Good quality Standard Module management rights with strong historical top up evidence and decent incomes can be financed on favourable terms via mainstream banks. It's that simple.

In conclusion, I’m not bagging the banking industry here and certainly we and our clients appreciate the tremendous support we get from the seasoned professionals. It’s just that if you are a lender promoting support for the management rights industry but then knocking 30% of buildings (my best guess for the number of standard module regulated management rights) maybe it's time for a bit of reflection and maybe a more balanced approach.

locations are you looking at?’ ‘Are you open to both short-term and permanent management rights?’ ‘How many rooms do you need in the manager’s residence?’

‘How much are you able to invest?’ All fairly standard and important questions, I’m sure you’ll all agree.

One piece of information that is frequently volunteered to me is the type of module that is being sought. Or…more to the point…not being sought. ‘We’re not interested in management rights on standard modules’ people inform me.

It never ceases to amaze me that some buyers have such a fixed viewpoint, on what is essentially a secondary or even tertiary issue, from such an early point in their search. What a crying shame to dismiss a third of all properties out there before you’ve even started looking!

We must ask ourselves where the source of this negativity is, because I can honestly say it is not from anyone at Resort Brokers, nor from any of the industry professionals that we associate ourselves with. This is due to the fact that we know our industry and know that there is not necessarily anything to be concerned about with standard modules. In actual fact, experience tells me that in some cases they present wonderful opportunities.

As pointed out by Mr. Phipps, the negativity towards standard module

MR’s seems to stem from bankers at certain institutions who choose to steer prospective clients away from properties that do not meet their specific lending criteria, rather than towards properties that will actually suit their clients’ aspirations.

What sort of service is that! This sentiment is then filtered down amongst operators (after all, it is a close-knit industry), and undoubtedly exasperated by brokers who do not understand the industry and wish to exploit the negativity to serve their own interests. ‘Don’t buy that, it’s on a standard module…buy this instead’.

So why are standard module properties regarded by some as being inferior to the accommodation module alternative. I think the answer can be broken down into two areas…security and financing. Given the fact that I’m a mere broker, let’s explore this in simple layman’s terms.

From a security point of view, buyers seem to worry that the 10 years provided by the standard module is a very short period of time, whereas the accommodation module with up to 25 years provides a very long period of time. For a start, MR’s on the accommodation module are rarely (unless off-the-plan) sold with a full 25 years remaining. The general consensus is that having over 15 years remaining enables a MR to realise its full value. Conversely, standard module properties are almost

Alex Cook BROKER PERSPECTIVE

Standard modules a logical approach As a broker working in the management rights industry, something I find myself doing on a day-to-day basis is ‘qualifying’ prospective purchasers. ‘What sort of

25 YEARS

accommodation module resortbrokers.com.au

21

always sold subject to a top-up to 10 years on settlement, so buyers are generally going in with the maximum amount of tenure that is possible to be granted to them. A good show of faith to start you off, one would think.

What I am getting at here is that buyers are often too fixated on the number of years on the agreements, rather than the history that has got the tenure to that number of years in the first place. I’ll give you an example. Property A is on the accommodation module and has 16 years remaining on the agreements. The complex opened 14 years ago. 9 years ago it had a top-up motion approved. Since then it has had two motions for top-ups refused.

Property B is on the standard module and has just had a top-up to 10 years. It opened 23 years ago, and has never had less than 8 years on the agreements. Most buyers in today’s market would pick property A over property B, which in my opinion is missing the point altogether.

The tenure of caretaking and letting agreements is in many ways a direct indication of the level of support and approval provided by the BC committee and the unit owners. A standard module property should not be regarded as having ‘only ten years’; instead it should be regarded as having the maximum amount of tenure that can possibly be granted.

It is important not to focus solely on the number of years remaining, but also on the historical evidence of unit owners supporting extensions.

My experience tells me that owners of standard module MR’s often take much better care of their tenure. Small one or two year top-ups are requested annually or biannually. To voting unit owners, this is generally seen as an insignificant request, so they do not think twice about supporting the motion. On the flip-side, owners of MR’s on accommodation modules often do not give their tenure any consideration until they think about selling, often 5 or 6 years after they have purchased. Unit owners are not accustomed to seeing motions for top-ups, and may look upon a request for a 5-year extension (the maximum permissible in one year) as a big deal. Unless the owner has maintained good relationships with the owners, or is adept at ‘canvassing’ for support, motions for top-ups can sometimes be voted down.

The other area for consideration is financing. I will not go into this into this in much detail, as Mr. Phipps has provided a very clear explanation as to how banks look at standard modules. The simple fact is that lending institutions that truly understand (and support) the management rights industry do not have any concerns in offering favourable lending terms to MR’s on standard modules. The suggestion that ‘banks do not lend on standard modules’ is incorrect and harmful to our industry.

22

resortbrokers.com.au

On the finance front, I would like to make a comment about value. As we all know, supply is driven by demand. As already discussed, an unfounded negative attitude has developed surrounding standard modules, causing demand for them to fall. In today’s market, if you were to consider two MR’s, identical in all ways (income, location, manager’s residence etc) apart from the fact that one was on the standard module and the other on the accommodation module, you would expect to see variation of the multiplier applied to those businesses. In my opinion, the variation depends largely on the income level. For small income MR’s (under $80K) you might expect this variation to be as much as 1X. As incomes get larger, the gap narrows.

The point I am making here is that if buyers are prepared to consider standard module properties (as they should), they can quite often end up with superior businesses. Not only are fewer buyers looking at them, generally creating wider choice, but they will also generally get a better return for the money they invest.

‘More bang for your buck’ as I like to say.

This increased return generally more than makes up for the fact that repayments might be higher (if principal and interest applies). Quite simply, my advice to buyers is ‘open yourself up to standard module properties and you may well end up in a better property than you imagined, earning more money than you expected.’ After all….isn’t that what it’s all about?

Peter Spranklin LEGAL PERSPECTIVE

Standard Module or Accommodation Module – does it really matter?

In the last couple of months we have received a number of enquiries concerning the acquisition of management rights

businesses that have been established under the Standard Module (otherwise known as the Body Corporate and Community Management (Standard Module) Regulation 2008) rather than Accommodation Module (otherwise known as the Body Corporate and Community Management (Accommodation Module) Regulation 2008) and as a result, interested parties have demonstrated that an element of uncertainty exists about the adequacy of the Standard Module to meet their future needs.

To a large extent, this inherent uncertainty is often aligned with the concerns of a prospective financier as distinct from the legalities surrounding the terms of appointment or the conduct of business at an operational level.

However, as with many industries, the concerns of stakeholders usually have their foundations at a legal level and accordingly the present is an opportune time to discuss those issues. With the market experiencing a consistent level of activity, it is worthwhile that shrewd purchasers better understand this form of engagement.

The starting point for a conversation about Standard Modules must be to look at the intent to which a development was initially constructed for the reason being that once a Body Corporate is created, the ability to change the Regulation Module can be challenging. There is broad understanding that Standard Modules are adopted by developers that foresee a majority of owner-occupants whilst the Accommodation Module form of regulation is user-friendly for investor dominant Body Corporates. Of course, Body Corporate legislation is not limited to two forms of Modular regulation but naturally these are the forms that lend themselves to the management rights industry.

So from the time of creation, the regulation of a Body Corporate is set and in many instances the appropriateness of the Module is seldom reviewed notwithstanding the mix of Lot Owners within the Body Corporate may have changed from this time. The Standard Module in legal terms is viewed as being the "default" regulation for the reason being that legislation describes it as being applicable "if no other regulation module applies to it". Accordingly, there is a degree of foresight that is exercised by a developer when faced with disclosing to unit buyers, investors or otherwise, which Regulation Module is to apply to their future development. A cautious developer that is undecided on the type of investment they may have in their complex, owner-occupier or investor, may well decide to adopt the Standard Module to avoid the prospect of facing statutory penalties should the wrong Regulation Module be applied.

Once nominated the impact of the Regulation Module adopted gives rise to the maximum term a manager may be engaged by a Body Corporate, 10 years (Standard Module) or 25 years (Accommodation Module) respectively.

However other than the term, what else changes in the eyes of the Body Corporate and/or manager? An appointment and the duties entailed under the Standard Module need not and usually do not change. A Body Corporate should be expected to provide the same level of exclusivity to the contracted manager to protect them from attempts by other Lot Owners to operate with competing interests, rates of remuneration are commensurate to the caretaking duties performed and Lot Owners have the right to exercise discretion in appointing the contracted manager as their letting agent.

So essentially, managers are acquiring the same terms of appointment, encountering and holding the same discussions with Committees and Lot Owners about their on-going performance, and conduct their business on a daily basis without reference the type of Regulation Module applied.

At the time of acquisition, engaged lawyers will take predominantly the same approach to evaluating the vendor's business under the Standard Module as they would with an Accommodation Module governed complex. Further still, matters that are and become important to a manager governed by the Accommodation Module maintain the same degree of importance to a manager under a Standard Module, such as whether the Body Corporate has a history of supporting the manager in the conduct of duties and services. When the characteristics of each Regulation Module demonstrate that 'sameness' is prevalent across each, at least in an operational sense, and all management rights operators are acutely aware that they operate in a relationship-driven business where results count, why then should financiers drive a different policy when evaluating each?

Diligent operators will always maintain a strong relationship with Lot Owners and therefore demonstrate by action that results count, and when seeking an increase in term they are placed in good stead. Maybe greater consideration of the suitability a prospective manager has to the management rights industry should be given when assessing the perceived limitation that the Standard Module term delivers which ultimately, could have resulted from a developer being undecided of the likely Lot Owner mix.

If you would like further information on this topic then please contact either David Burrough or Peter Spranklin on 07 3220 1144.

The State of the Market

BY FRANK HIGGINSON HYNES LAWYERS

In a word – busy.

There seems to be more activity in the management rights market than we have seen since before the GFC. Pre GFC, the activity was driven really by the big end of town in a sense – Breakfree (MFS), S8 and Oaks chasing big buildings with one or two smaller operators trying to do the same thing. Anyone remember Amrites or Prime Apartments?

Current management rights activity seems more organic and is seemingly across the board. If you want to know what is going on out there, then read on.

This is not a ‘legal’ newsletter in a way, but we think it is something that most of our audience will want to read about. So, without trying to cross any professional lines, here we go.

What’s going on?

Good listings are thin on the ground – every broker has the same story. They have multiple buyers but not as many quality listings for them to buy. Part of that problem is a bit self perpetuating – sellers don’t want to sell unless they can move into something else, and the inability to find something else means they don’t list for sale. A very unvirtuous circle from a broker’s perspective.

Direct deals – we have been involved in more direct deals than we have in a long time and before anyone asks – no, not as brokers as that is way beyond our skill set. Clients come to us saying they have bought or sold direct. Sometimes this is through a friend and sometimes it is through being door knocked. These deals are always a bit harder because sometimes the parties are simply not ready for sale - meaning there is far more execution risk to the transaction (i.e. it falls over because one side or the other isn’t properly managed through the process or otherwise prepared).

Multipliers are on the move – this is as close as we get to valuation advice. Valuers tell us multipliers have very much stabilised and are increasing for quality properties. Brokers are telling us the same thing. > Continued on page 31 resortbrokers.com.au

23

FH

Absolute beachfront hotel with future development opportunity Sarayi is located north of Cairns, in the tourism hot spot of Palm Cove. It has prime esplanade frontage. The site is ideally located within the heart of the tourist strip.

The freehold of this three storey beachfront hotel is available for an astute purchaser. It provides a mixture of hotel accommodation and retail. The resort comprises of 26 guest rooms, reception / tour desk with an incredible rooftop terrace and swimming pool.

Freehold land in a location like Palm Cove is very limited; the entire strip of resorts is predominantly strata-titled, making Sarayi a unique opportunity.

In addition to the fore-mentioned components, Sarayi has significant development opportunity given its dual street frontage.

There is potential for an additional 12 x 2 bedroom apartments.

Other avenues for increased revenue include promoting to the rich and famous or major hotel branding as well as a rebuild in the future with extra rooms - the choice is endless.

• 18 x modern and spacious hotel rooms and 8 x one bedroom apartments • Magnificent views of the Coral Sea • Large grandeur hotel foyer and reception area • Rooftop terrace - highly sought after wedding and function venue for locals and tourists

Price: $3,750,000 resortbrokers.com.au/motels-for-sale/FH002957

Shane Mullins Broker Mobile. +61 447 185 001 Email. shanemullins@resortbrokers.com.au Headoffice. 07 3878 3999 24

resortbrokers.com.au

Exclusive LH

An opportunity to purchase the Northern Territories' best boutique cabin & caravan park Return travellers always come back to the Boab Caravan Park.

Some have described it as an oasis in the desert. It's beautifully landscaped grounds and lush green grass makes it different from the competition.

Built some 25 years ago, it has been completely refurbished only two years ago. The outside appearance is warm and inviting with large peaked sails that give the park a distinct appearance that visitors remember and recognise.

As you enter the central facility building you walk into a well maintained and designed shop that sells everything from groceries, to take away food, novelty gifts and petrol. This is the nerve centre of the park in terms of operation and is popular with both the in-house guests as well as the general public. The store accounts for well over half the income of this property. There is a real opportunity to extend the opening hours and increase the profit.

Located only a couple of hours from Kakadu, Litchfield and Gregory National Parks, the town of Katherine is the central hub of the region.

The ideal purchaser for this property would be a couple looking to make outstanding money with a relatively 'easy care' business. It is currently operated with some excellent staff in place, all of whom are happy to stay on. • The park consists of eight x self contained cabins, 37 x powered sites, onsite guest laundry and excellent ablution block • 2 x two bedroom managers residences with large front and back patios. Both open onto a private garden area • Showing a massive 45% plus return!

Nett: $252,000 & growing

Price: $550,000

The property is located in Katherine which is ideally positioned as a base from which to explore all the Top End has to offer.

resortbrokers.com.au/caravan-parks-for-sale/FH003291

Ian Crooks

Trudy Crooks

Broker

Broker

Mobile. +61 411 171 648

Mobile. +61 477 882 210

Email. iancrooks@resortbrokers.com.au

Email. trudycrooks@resortbrokers.com.au

Headoffice. 07 3878 3999

Headoffice. 07 3878 3999 resortbrokers.com.au

25

Exclusive FHGC

ONLINE AUCTION - multi award winning 4 star motel in idyllic waterfront location Resort Brokers has been appointed to auction the freehold and business of the Harbourview Motel, Bermagui.

Located in an idyllic and enviable position overlooking the pristine harbour, next door to the golf club and one block to the village centre, this motel offers an exceptional opportunity.

The excellence of this motel is evident by the many awards it has received over the years due to the design, location and high quality finishing.

This property is an amazing investment! Not only is there the potential to increase the occupancy rate, but also the added benefit for future development on the large acre block. The NSW South Coast is a booming tourism mecca and with P&O Cruises including the nearby port of Eden in their 2015-2016 cruising calendar tourism will increase further.

This property will be auctioned online via the auctionworksonline. net.au website. This unique process means that you can bid for this property and track the auction, over a week, from the comfort of you own home. Please contact Russell for more information.

• 15 x 4 star modern, clean and extremely spacious units • Each unit (approx 40m2) has its own kitchenette, plus courtyard with individual gas BBQ at rear • Conference function room with commercial kitchen • Spacious three bedroom owner/managers residence on site • Added income opportunity from retail shop at the front of the block • Large 4000m2 block, room for further development • Excellent tourist town with four seasons of trade. Year round golfing and fishing enthusiasts, spring and summer family holidays • Bermagui is the closest town to the continental shelf on the NSW east coast. It offers game fishing (just half an hour off shore) and whales can be seen from September - November

Online Auction 15th-22nd October resortbrokers.com.au/motels-for-sale/FH003148

Russell Rogers Broker Mobile. +61 416 166 909 Email. russellrogers@resortbrokers.com.au Sydney office. 02 9904 8224 26

resortbrokers.com.au

Give your business the edge it deserves!

• A simple, easy to use system • An inbuilt channel manager with full 2 way integration • The latest functionality at an affordable price • Automatic email facility for guest marketing • Optional direct connection to Google Hotel Finder, the newest channel for your business

HiRUM Hospitality Software has been providing motels with a simple and effective reservations management system for 21 years.

From just $99 per month*, fully inclusive, is it any wonder we are recognised as the most affordable motel solution on the Australian market today.

Conditions apply

*

SOFTWARE SOLUTIONS HiRUM…we invented simple

07 5574 4990 sales@hirum.com.au www.hirum.com.au

MR

Substantial growth opportunity in premium location This property consists of 84 apartments, a mix of one and two bedroom, 30 of which are in the managers letting pool.

The current owners have had managers running the property for a couple of years which has seen the income drop substantially. A fresh face, renewed enthusiasm and hands-on management would help to fulfil the potential of this stunning property.

Perfectly positioned for a boating lifestyle, the complex is right on the Nerang River and only is a short walk from Surfers Paradise, Chevron Island and Broadbeach.

• Large net profit and body corporate salary • Large two bedroom managers unit in the perfect location • Opportunity to increase the income substantially • Located on the beautiful Nerang River

Nett: $315,000

Price: $1,900,000 resortbrokers.com.au/management-rights-for-sale/MR003211

Carolyn Griffith Broker Mobile. +61 419 675 429

Headoffice. 07 3878 3999

Email. carolyngriffith@resortbrokers.com.au

Exclusive MR

Boutique holiday complex netting $142,000 On the edge of Surfers Paradise is this immaculately presented, boutique holiday complex. Far enough to be out of the hustle and bustle but close enough to enjoy the restaurants, cafés and retail therapy of central Surfers. The beach is only 100m away.

The complex consists of 36 apartments all one bedroom apart from the manager's unit. The current owners have built the business up substantially in the last four years, but there is still plenty of grow to move with several units due to come back into the letting pool shortly.

• Currently operated with one full time person and a partime receptionist • Flexible office hours • Minimal caretaking • Plenty of growth potential

Nett: $142,000

Price: $949,000 resortbrokers.com.au/management-rights-for-sale/MR003217

Carolyn Griffith Broker Mobile. +61 419 675 429 Email. carolyngriffith@resortbrokers.com.au 28

resortbrokers.com.au

Headoffice. 07 3878 3999

Exclusive FH/LH

High return business in thriving town!! Leasehold or freehold The Ararat Motor Inn is an excellent 3.5-4 star property providing inner city quality in a rural setting. Available is a leasehold or freehold - the choice is yours.

Boasting five bedrooms, this motel has one of the best residences you could ever wish to see, making it perfect for a large family.

Ararat is a vibrant town with many tourist attractions and a newly renovated hospital and prison. These features ensure a strong mix of corporate and tourist trade and anyone who inspects this lovely motel will not be disappointed.

• 14 well appointed 4 and 3.5 star motel units • Gateway to the Grampians National Park • Healthy 19.5% return on investment • Leasehold available by negotiation. 25 years, market rent.

Nett: $343,249

Price: $1,760,000 resortbrokers.com.au/motels-for-sale/FH003174

Gerard Hurry Broker Mobile. +61 417 250 211

Melbourne office. 03 9347 3100

Email. gerardhurry@resortbrokers.com.au

Exclusive LH

A sensational business with stunning views This unique accommodation business ticks so many boxes. It’s located overlooking the Great Ocean Road and the view from the villas and manager’s villa is nothing short of breathtaking.

With a long lease and rent based on turnover, it’s a sensational business with very low risk.

• Rent linked to income and paid monthly • Long 24 year lease remaining • Consistently good occupancy • Landlords required to paint every 5 years and repair/replace all furniture, furnishings and chattels

• 4 star (self-rated) property with amazing views from villas • Massive five bedroom managers villa with unbelievable views • Currently run under management and would benefit from handson operator

Nett: $238,008

Price: $895,000 resortbrokers.com.au/motels-for-sale/LH003230

Stuart Charles Broker Mobile. +61 458 588 472

Melbourne office. 03 9347 3100

Email. stuartcharles@resortbrokers.com.au resortbrokers.com.au

29

New kids on the block The latest three appointments to Resort Brokers’ national team span three states and bring an impressive range of skills and experience to the table.

In expanding to meet growing demand and deliver exceptional standards of service across key market areas, Resort Brokers engages skilled consultants with proven experience in tourism accommodation and hospitality business.

These new representatives epitomise the value of that approach, each with an impressive record of experience and achievement in the industry.

From tropical North Queensland to cosmopolitan Victoria, and the rich tapestry of regional New South Wales in between, these accomplished brokers are now at your service.

Des Fagg

Liz Galea

Andrew Rendall

TOWNSVILLE & SURROUNDS

NORTH EAST VICTORIA

CENTRAL WEST NSW

Those who make a go of the tough and unpredictable farming sector have to be dedicated and resourceful. Des came to the accommodation industry after two decades on the land, the first in grain farming at Clermont, the next in the Burdekin growing cane.

So, when he bought the management rights to the Quadrant Apartments in Townsville, Des had the ability and commitment to succeed. We met Des three years later, when Resort Brokers sold the Quadrant rights for him.

Next he bought the Googarra Beach Caravan Park lease at Tully Heads. After 18 months, with the park ticking over nicely, and operated by his wife and daughter, Des was keen for a new challenge. Resort Brokers jumped at the chance to put his obvious skills to work for vendors in the north. Look out for Des. He’s keen to say G’day.

30

They know their regions intimately and have owned and operated properties themselves, giving them a level of insight and expertise invaluable to vendors and buyers.

resortbrokers.com.au

Liz has excelled in the accommodation industry throughout her career. First she joined Melbourne’s grand Windsor Hotel, and later was sales executive with Le Meridien.

Liz joined Quest Serviced Apartments corporate office in 2001, working for several years at senior national management levels.

This laid the ideal foundation for Liz to pursue her own business aspirations in the industry. She went on to be franchisee at Quest Potts Point from 2008 to 2011, while also operating Quest Beaumont in Kew from 2005 until selling the business earlier this year.

What a highly motivated professional, with so much direct industry experience to bring to her role as Resort Brokers’ motel broker in Victoria. Our clients in Melbourne and beyond can certainly be confident they are dealing with someone who knows the accommodation business inside out.

In his early career in geophysics and exploration for BHP, Andrew struck gold near Orange. The Cadia mine he helped develop, now owned by Newcrest, is one of Australia’s biggest. Resort Brokers has certainly struck gold in welcoming someone who’s contributed so much to the hospitality industry.

After a decade of success in other businesses, Andrew bought Shanahans Family Hotel in Bathurst. He owned it for 13 years (and one day!) before selling the thriving pub in March this year. For eight years, Andrew has served as a Delegate to AHA NSW, and for five years as an AHA executive board member at both NSW state and national levels.

So it’s fair to say he knows a thing or two about our industry! As our broker handling motel and hotel sales in the region taking in Dubbo, Parkes and Wagga, Andrew is looking forward to helping others to buy businesses that he knows offer great financial rewards.

State of the Market - Continued from page 23 Dutch auctions – these seem to happen when properties are open or at least dual listed. One offer seems to incite another – particularly from the other broker involved in the deal who didn’t get the first offer on the table. Not that it is anything to do with the broker – it is usually the other brokers buyer fearing missing out on the building.

Holiday buildings are selling again – there is only so long people can wait it out. You cannot say it hasn’t been tough for tourism operators with a high Aussie dollar (meaning it’s more expensive for tourists to come to Australia and easier for all of us to travel), along with the confidence sapping news cycle. But with multipliers moving and revenue increasing, we are seeing more of these buildings transact.

Corporate buildings – In Brisbane everyone is waiting for the bonanza that will be the G20. The LNP cuts were tough for corporate operators, as was the downturn in the mining sector (particularly coal and mining services), where costs were cut dramatically. That has been across the board as well – particularly in central Queensland. You would like to think the worst has passed, but with this economic environment, who knows?

Permanent lettings –without doubt there was some softening of multipliers along with everything else post GFC, but the cash flow for permanents is very continual. As a rule this style of complex has basically sailed through unscathed over the last few years. The increase in development creating new rental product is the only real threat to permanent rentals as vacancies then take longer to fill with the increased supply.

External managements – it is becoming more frequent for permanents to include some outside managements in a sale. You need a full licence to run these

(and will under the POA when it arrives – reportedly around October).

It’s not just the south east corner – Brokers Australia up north are telling us they have done more sales in the first 6 months of this year than they have in the last one to two years. This probably reflects the holiday buildings starting to transact.

Off the plan – we wrote about this a few months back, and these still remain relatively frequent occurrences. One trend seems to be that people are buying them (or sellers are selling them) later and later in the project, meaning there is often a mad scramble to get the contract done, letting appointments out and settlement effected.

And it’s not just Queensland – New South Wales management rights (for us at least) seem to transact in bunches. We have four on or none. The management rights market in New South Wales is much smaller than Queensland, but they still turn over. We have also seen our first few Victorian deals too – showing the management rights system is spreading.

Bodies corporate – are becoming increasingly more informed (that damned interweb thing again). The days of ‘tick a box’ assignments are gone, and this especially applies where the body corporate’s previous management experience was not a pleasant one. We are aware of a few bodies corporate who have said no to an assignment based on the purchasers’ qualifications and experience (or lack thereof ) in the last few months.

The same comments apply to getting new agreements or topping up existing ones.

Taking either for granted is not necessarily a smart move.

The latest wave of buyers – buyers tend to come in themes. We have had Kiwis, South Africans and now it is the turn of the Chinese. For us the big difference between these groups is the different mother country (which ordinarily allows an immediate bond for antipodeans) and

the potential language barrier. Chinese management rights owners are no different to any other management rights owner – there are good ones and bad ones. More often than not the difficulty we see is that when there are issues with a body corporate the different cultural backgrounds and inability to communicate effectively can create a large roadblock to solving the issues. These differences sometimes exacerbate the problem before it even hits our desks.

In summary As best we can tell (noting we come from a very unqualified economics background), while interest rates remain low and confidence with residential property increases there probably aren’t too many clouds on the horizon. Having travelled through a few of these downturns now (and with some skin in the game in the last one – some of which was unfortunately left on the playing field) it is incredible how much our economic activity is tied to the residential property market.

Our homes and / or investment properties are catalysts for almost all investment at the SME level. If we can sell or gear against them we are fine. Things happen. If we can’t then things grind to a halt. In bank lending the sales force on the front desk are seemingly back in control, with budgets to meet, so when banks loosen the purse strings things happen too.

All of this is opinion. It isn’t fact. It will however be very interesting to publish another one in 12 months and see what played out. They say forecasters should predict early and predict often – you are bound to get something right. Lets see how we go!

We would be very interested in feedback from anyone who is willing to provide it: Frank Higginson - Hynes Lawyers 3193 0500 resortbrokers.com.au

31

Exclusive LH

Near new, flourishing serviced apartments leasehold in major NSW rural city Opportunity to secure the leasehold of Dubbo’s newest accommodation facility. Completed and opened in December 2011 Quest Dubbo has matured into the No 1 accommodation venue in the city.

Dubbo is the central hub of Western NSW with a population of 42,000 and a wider catchment area that it services of an estimated 120,000 people. The city is a growing economy with investment continuing in areas such as health, agriculture and mining.

The property consists of 42 serviced apartments (65 keys) including studio, one bed, two bed and three bed fully self contained units featuring separate living / dining areas, fully equipped kitchens and laundry facilities (except studio apartments).

• Long term lease - 23 years • Market rent • Building completed and business commenced December 2011 • No capital expenditure required for some years • Rated No 3 on Trip Advisor • Developing business with excellent year-on-year growth • Member of the Quest Serviced Apartment Group • Finalist in the HM 2014 Awards - Best Regional Property

All are stylishly furnished with TV’s, air conditioning, WiFi and Foxtel. Some apartments have private balconies. Property facilities include conference room, gymnasium, alfresco BBQ terrace area and onsite parking.

Nett: $477,892

Since opening in December 2011 the business has continued to grow with annual increases in occupancy, income and profitability.

The lease tenure is in excess of 23 years the business and is ideally positioned to continue the excellent growth in the Dubbo market.

Price: $1,900,000 resortbrokers.com.au/motels-for-sale/LH003266

Jim Chapman Broker Mobile. +61 413 444 782 Email. jimchapman@resortbrokers.com.au Melbourne office. 03 9347 3100 32

resortbrokers.com.au

Looking for a broker to sell your accommodation property?

Did you know that Resort Brokers Australia sold 151 properties in the last financial year?

Speaks for itself really.

Resort Brokers Australia We sell more.

EDITORIAL

Financial Strategies for Small Business Operators

BY TONY ROSSITER HOLMANS ACCOUNTANTS

Preparing for the Financial Year Ahead

The start of a new financial year should encourage new strategies to be developed for the year ahead. Currently all the key drivers are in place for success in small business; interest rates at historically low rates for now and the foreseeable future, relatively low unemployment and a moderate inflation rate. So why aren’t we outperforming in our business.

I suggest the one missing piece of the puzzle is consumer confidence. In the accommodation sector (particularly the leisure market) business lives or dies based on consumer confidence. Despite the recent political uncertainty arguably behind us, we are still operating in an environment of relatively low consumer confidence quite likely as a result of the contractionary nature of the recent Federal Budget.

However it’s never too early to focus on financial strategies in order to minimise tax, reduce risk and be prepared financially for the year ahead. Effective tax planning is something that should be considered year round, and by making it a priority, could result in you paying less tax and reducing the cost of doing business irrespective of the level of consumer confidence. By preparing and updating a forecast of income and outgoings, businesses can identify times when money may be short and plan accordingly.

Following are some fundamental guidelines that help ensure your business is prepared for the financial year ahead.

Managing CGT Liability

Tax payers can reduce their tax liability at financial year end by deferring the realisation of a capital gain until after 30 June.

If you are thinking about selling an asset this year for a profit, you may want to consider deferring the signing of a contract until post 30 June. This could reduce the amount of Capital Gains Tax you are liable for and in turn reduce the tax 36

resortbrokers.com.au

you have to pay.

Deferring the sale of an asset for potentially a relatively short period of time can delay your Capital Gains Tax liability for up to a year, and in some cases longer. If you expect to earn a lower taxable income in the following year, the tax you have to pay on the realised capital gain in that year may decrease significantly. For example, by deferring the sale of an asset until the following year when you expect to earn less income, your tax rate will change to a lower bracket, meaning you save considerably on tax. Some other strategies to minimise Capital Gains tax include: • Utilise the CGT small business and retirement concessions • Match gains and losses where possible to avoid carrying forward a capital loss • Defer a disposal to a subsequent income year • Defer a disposal to ensure the asset has been held for at least 12 months to potentially benefit from the 50% discount

Maximising Superannuation for over 50s

From 1 July 2014 the level of tax concessional superannuation contributions that you can make will be increased on the previous year.

For taxpayers under the age of 50 years their concessional limit has been increased to $30,000 per year. For taxpayers between the ages of 50 years and 60 years their concessional limit has been increased to $35,000.

Now is the time to start planning how you can maximise your tax concessional contributions through different strategies if you haven’t already done so.

Commence a Transition to Retirement Pension – from the age of 55 you can commence a transition to retirement pension from your Superannuation Fund. Delaying this transition could mean that you miss out on benefiting from the total franking credit refunds and the opportunity to convert taxable investment income in your Superannuation Fund into tax free earnings.

If you are still working, the pension you initiate can be restricted to a retirement pension, or unrestricted if you have no plans to work again.

Withdrawal and Re-Contribution – if you have already started a pension, it may be worthwhile to consider a withdrawal and re-contribution strategy to enhance the tax fee component of your superannuation.

This option provides advantages where you anticipate beneficiaries inheriting a portion of your superannuation.

Maximising your Property Claim – property investors could guarantee more cash in their pockets this end of financial year by maximising property depreciation deductions.

A qualified Quantity Surveyor inspects a > Continued on page 59

Exclusive LH

Great Ocean Road gem - thriving serviced apartment business On offer is the 4 star leasehold interest of Quest Warrnambool, featuring 43 studio, one, two and three bedroom fully self-contained apartments as well as 4 x two storey townhouses with double lock up garages.

It is a major destination for people travelling along tourist routes including the Great Ocean Road, Princes Highway and the Melbourne-Warrnambool railway. Numerous cultural and sporting festivals play a major role in the city's tourism economy.

The property facilities include two conference/meeting rooms with adjoining kitchens, a solar heated in-ground swimming pool, paved alfresco BBQ area and on-site car parking.

• Member of the Quest Serviced Apartment Group.

• Consistently enjoying occupancies in excess of 80% • Rental review in August 2014 has commenced • Leaseholder requesting no rental increase and an extra 4 x 5 year options • Recently refurbished to 4 star standard • Long secure lease with market rent • Ideal opportunity for an owner/operator

Constructed in 2004 and a member of the nationally recognised Quest brand, the property has achieved substantial growth in occupancy, income and room rates.

Warrnambool is 290km south west of Melbourne and is the fastest growing economy and population centre on the great south coast.

The city is a major provider in the fields of commerce, government, social services, health, education, culture, the arts and recreation.

This range of sectors provides an employment base for the city's growing population of approximately 32,000.

Nett: $572,585

Price: $2,150,000 resortbrokers.com.au/motels-for-sale/LH003304

Jim Chapman Broker Mobile. +61 413 444 782 Email. jimchapman@resortbrokers.com.au Melbourne office. 03 9347 3100 resortbrokers.com.au

37

Two Absolute Beachfront Management Rights, Noosa Exclusive Property 1

Once in a decade! Hastings Street, management rights Key benefits • No residence to buy - no need to reside on site - 100% investors • $195,000 body corporate salary, minimum real estate investment • Absolute beachfront position • First to see will buy

Nett: $620,000 (tbc)

Expressions of interest

Confidentiality conditions apply

Exclusive Property 2

WOW! your own private beachfront - how unique is this!

The management rights of one of Noosa’s most iconic properties is up for grabs • Premier resort set amongst tropical gardens with 300m of private beach • Long agreements • Fully renovated manager’s accommodation and stunning resort facilities

Nett: $560,000

Price: $3.723mil

Glenn Millar Broker Mobile. +61 412 277 804 Email. glennmillar@resortbrokers.com.au Headoffice. 07 3878 3999

38

EDITORIAL

Shane Wynhoven RESORT BROKERS AUSTRALIA

Mining, like most businesses, is cyclical.

Understanding the pattern of peaks and troughs, and the key factors influencing the industry, can help accommodation providers plan for and respond to demand fluctuations caused by the highs and lows.

The most important thing to remember is that there will always be upswings and downturns, periods of high activity followed by slowdowns.

That way, you’ll be able to respond to demand swings and manage your property accordingly. The good news is, the longterm fundamentals for businesses in mining areas are very strong.

Why the slowdown?

A combination of factors has contributed to the resource sector slowdown, including: • the introduction of new taxes (carbon tax and mining tax - have since been repealed) • a high Australian dollar (or relative weakness of other currencies) • lower commodity prices • demand and supply fluctuations.

But the situation most directly impacting accommodation operators in mining activity areas is the switch from a mine construction and development phase to a mining production phase, as well as major staffing restructures. The resulting reduction in demand for workforce and contractors has contributed most to declines in occupancies and tariffs in the resource rich regions.

The workforce demands of the last five years have been huge, as mining companies invested heavily to get projects off the ground. Once operational, the need for personnel scales back to a more stable production and maintenance level.

On top of this, the industry has entered a more constrained and competitive phase, a period of higher costs and weaker demand.

This has prompted many miners to put projects on the back-burner. Given the materials they produce are nonperishable,

Accommodating phases in mining Australia has just enjoyed a decade long mining boom, the biggest since the gold rush. Now the sector’s pace has moderated. So what does it mean for accommodation providers and those looking to invest in mining regions? it makes perfect sense for them to be patient and wait until conditions are more favourable.

Cyclical growth ahead

Accommodation owners should know the fundamentals of the mining industry haven’t changed. In a recent article, Adrian Hart, head economic analyst at BIS Shrapnel’s Infrastructure and Mining Division, said the next major upswing in mining activity might be two-three years off, but the good times will be back.

“We’ll be in a completely different world,” he said, " where we have stronger global economic growth and demand for metals and minerals, and we will have a much weaker Australian dollar compared with the US dollar. It’s always a cyclical industry.”

So, don’t fret too much about the current phase. There is phenomenal wealth still to be realised in our mining areas. Despite what you may be hearing, the mines are currently producing at record levels. They may not be spending on new development right now. But they will, because there is still massive need for expansion. BIS Shrapnel’s ‘Mining in Australia 2013 to 2028’ report says the mining investment boom peaked in 2012-13 and is forecast to decline 20% over the five years following.

But mining production is poised to grow 41% over the same period, driving

commensurate increases in mining operations activities, maintenance and exports. Opportunities are opening up in operations, maintenance and facilities management.

Planning for prosperity

Don’t forget, not only does Australia have incredible stores of minerals and commodities, it presents a very stable and efficient business model, making it a highly desirable business partner. Also, the Government has axed the carbon tax, effective 1 July and, as we go to print, the Senate has just voted to repeal the mining tax.

The critical points for accommodation providers to understand are: • Demand for accommodation will have peaks and troughs, just like the businesses around you. It is important to focus in what it is, rather than what it isn’t. Moving from 85% occupancy to 60% occupancy for a period is not dire … some coastal properties dream of such a business.

• Planning must be long-term to ensure, when there is a peak business period, it can be dealt with efficiently and intelligently and, when there is a quieter period, the business can be operated frugally and with even more intelligence.

• While it may be quiet temporarily, you can rest assured mining-related enterprises will unwrap the cotton wool and ramp up again. resortbrokers.com.au

39

EDITORIAL

Catie Langdon RESORT BROKERS AUSTRALIA

When it’s time to mind your own business There is a Chinese proverb: ‘He who is master of himself, cannot tolerate another boss.’ The desire to be your own boss, to call the shots yourself, drives many of us to leave behind the security of paid employment and opt for business ownership.

Being your

ownBoss

Many reasons motivate people to go into business for themselves. It might be as simple as wanting a change, or needing a challenge. It could be triggered by an unexpected circumstance, such as being laid off or being made redundant.

Others simply come to the conclusion they’d rather take charge of their future, creating their own work to fit their life goals, rather than relying on others. They dream of having the freedom and control over their own destiny that comes with owning and managing their own business.

Whatever the motivation, if you want to be your own boss, there are two broad options – start your own business, or buy an existing one. Make a job for yourself, or buy one.

Mitigating risk

If you have your own big idea, and the ability to start from scratch to build it into a business, then entrepreneurship might just be for you. But, for most, the high level of risk associated with a start-up business is unmanageable.

For a start, new enterprises find it more difficult to secure finance because every aspect of the business is unproven. Then it can take quite some time for a start-up to become profitable.

While small business failure rates are frequently overstated, research does show the tough road new businesses tread. The Australian Bureau of Statistics (ABS) tells us, of the 342,753 new business entries during 2009-10, 73.1% were still operating in June 2011. By June 2012, 57.7 were still going.

And a year on, more than half had fallen by the wayside, with just 47.5% continuing to operate by June 2013.

Buying an existing business or franchise dramatically reduces the risk compared with start-ups. The advantages can include: 40

resortbrokers.com.au

• a documented trading record • proven products, services and processes • current operational and marketing systems • an existing customer and referral base • established suppliers • trained staff in place • immediate cash flow With an existing business, you still enjoy the freedom, independence and satisfaction of being your own boss, just with more certainty. You are still in control and can shape it the way you want.

The right fit

What is vital is to choose the right business for you. First and foremost, look for a business that plays to your strengths. It should be in a field that interests you, where you will enjoy performing the required duties, and one that will benefit from the knowledge and talents you possess.

The accommodation industry has obvious appeal. No specific qualifications are necessarily required, but experience in so many fields is extremely valuable – customer service, hospitality, administration, operations, maintenance, marketing, account keeping, and so on.

It is also an industry into which most of us already have first-hand insight.

Having travelled and stayed in many establishments, you already understand what’s important to customers, and how their experience can be made more enjoyable and memorable.

Any move to become your own boss intrinsically links your business life and personal life. This can be felt to an even greater degree when you buy an accommodation business. Often, you are not just buying yourself a job, you are also buying a home and a lifestyle. All are interconnected.

Having decided to be your own boss, and

the type of business you want to buy, there are more decisions to make. The beauty is, you are in control, and you have choices. Consider the location where you want to live and work.

What size business do you want to manage?

Do you have other criteria in mind? Essentially, you write your own job description.

Wise counsel

Research, careful planning and following the advice of wise counsel are vital to lay the foundations for success. A good business broker can be invaluable.

Quality brokers turn down many

Your broker should provide expert help to assemble the team you need, from a financier who understands the industry, to accountants, solicitors and other professionals with specific, relevant experience. Such advisors are essential in reviewing and verifying all the information about the business you are considering.

Handled well, making the change to business ownership will be a story of risk meets reward, challenge brings growth. It is not so much about a desire to work more, or less, but to work in the way you want to work.

Of course, it has been said the unfortunate thing about working for yourself is that you have the most demanding boss!

But you are in charge, you make all the decisions, and you are responsible for your own success. That can open doors to greater satisfaction and a better financial future.

Paul & Jacinta BIG 4 POINT VERNON HOLIDAY PARK, HERVEY BAY

Darlene BEST WESTERN AMBASSADOR MOTOR LODGE, HERVEY BAY

Case Study 1: Family holiday from the mines businesses they are asked to sell, because financial records may be lacking, or a seller wants to overprice the property. A reputable broker effectively pre-screens available businesses for you, eliminating risky prospects.

A good broker knows how to pinpoint your skills, interests and goals, to help you select the right business for you. And of course you benefit from their knowledge of industry practice and regulations, negotiating skills, market intelligence, and professional assistance throughout the due diligence process.

Darlene and her brother Paul grew up on a Central Queensland cattle property. Each has spent over a decade working in the booming mining industry. For both it has been a lucrative stepping-stone to their ultimate goal – businesses of their own, a better life close to family, and futures built on their own initiative.

“I had a plan,” said Darlene, who spent 11 years working for a major Central Queensland mining operation in human resources and payroll. “The purpose was always to buy my own business. The company went through a merger, and the industry was changing, so it was time for me to make the move.”

Darlene already knew where she wanted

to be – in Hervey Bay “where we used to holiday when we were kids, and where my parents had retired after selling the cattle property.” She considered other business options, a café for example, but preferred the lifestyle and flexibility an accommodation property would offer.

“Soon after I started searching seriously, this motel became available. It had what I wanted – great location and a lot of potential.” So, in April, she and her partner took over the 21-room Ambassador Motor Lodge, opposite the beach, complete with pool, tropical gardens and a licensed restaurant and bar.

Meanwhile brother Paul, a dragline operator, had already moved his young family to Hervey Bay. But he was leaving wife Jacinta and two young children behind every week to commute the 600km to and from the mine.

“It was always my idea to one day have my own business,” he said. “I just wasn’t sure what it was going to be. My family and our future were the big motivators. Mining was good, but I just wasn’t spending enough time with my family. We were missing out on two much.”

Paul commuted for about 18 months.

But that ended recently when he took over freehold ownership and operation of the Point Vernon Holiday Park. For him, his accommodation business neatly wraps up everything he wanted – home, work and a great lifestyle all in one place.

Seven months in, Darlene is putting her previous work experience to good use – people skills, staff relations, budgeting, time management, administration, and so on. “I worked long hours in the mine, so I don’t mind that my day starts with breakfast and doesn’t end ‘til the restaurant closes,” she says.

“The upside here is the freedom. I am in control and, thanks to my amazing staff, there is flexibility. I have an excellent, supportive team. They’ve already taught me so much, and I know I’ll be learning for quite a while.

“We renovated the restaurant in the first two months, and there’s a lot more to do.

But that’s what we’re here for. We could see the potential, and this is for us. What we put in, we get out.”

Paul is relishing the stark contrast between his old routine and new responsibilities – from harsh mine environment to tropical coastal garden, from solitary operation to a friendly, laid back community. “I’m finding I love dealing with people,” he said. I actually love getting out around the park every day, even doing the bin run, because I get to see our guests and interact with them. I didn’t know if I’d be good at dealing with people, but we’re getting great feedback.

“I like all parts of the job, I don’t mind getting my hands dirty, but also like the office. I can be out on the golf buggy doing my jobs, but the kids can ride along beside me. I’m just happier being home. resortbrokers.com.au

41

Twofold Bay Motor Inn, Eden

Best Western Ambassador Motor Lodge, Hervey Bay

“A really big thing was also the land component – buying freehold – something we can call our own.”

Paul & Marnie TWOFOLD BAY MOTOR INN, EDEN, NSW

Case study 2: A force for change Last year, Paul was a police officer in the North Territory. He’d being pounding a ‘tough beat’ for 10 years. His young family was growing fast, and he and wife Marnie reached a crossroad. The Territory, and the life they had there, weren’t what they wanted for their future.

“The police force can have a shelf life,” Paul admits. “Particularly in the Territory.

The time came where we needed to think about our future. Would I apply for a transfer interstate? Or would we look for something else? We also wanted better education opportunities for our children.

And, in policing, you don’t get to spend a lot of time with your kids.”

While Marnie had operated her own hairdressing businesses, Paul had always been in paid employment. But his parents had owned freehold accommodation properties, both motels and caravan parks for many years, so he had some insight.

“When we did have time, we’d give them a hand and really enjoyed it. So we decided an accommodation business was for us,” Paul said. “We looked around for quite a long time, and we had definite criteria – we wanted to be near the water, the business 42

resortbrokers.com.au

Big 4 Point Vernon Holiday Park, Hervey Bay

had to have a solid trading history, and we wanted scope for improvement too.”

The couple found exactly what they were looking for in Eden on the NSW south coast. They bought the lease at the 4 star Twofold Bay Motor Inn. After operating the business for six months now, they say they are thoroughly enjoying what is literally a new lease on life.

So, does Paul find his previous work skills come in handy? “It’s similar to policing, I guess” he jokes. “I still give people a room for the night … it’s just that now they enjoy it!” On a more serious note, he says his experience in dealing with people and looking after their wellbeing is invaluable. “And I’m seeing people in much nicer circumstances these days.”

Paul still works long and hard, but now he has flexibility and control. “Now I can walk the children (aged 7, 5 and 3) to school. Before I could never do that. I’d either be at work or asleep. The rewards are infinitely better than being a wage slave,” he insists.

“We are extremely satisfied, absolutely no regrets. And the great ocean views are a bonus!”

Werner THE GLASS FACTORY APARTMENTS WEST END, BRISBANE

Case study 3: The way forward is clear Werner rose to senior levels during his career spent largely in the pharmaceutical industry. He project managed a large Enterprise Resource Planning (ERP)

The Glass Factory Apartments West End

software and systems implementation, excelled in IT management, established a new supply chain in China, and managed everything from acquisitions to budgets, from projects to people. He was ‘the boss’ to many, but not his own boss.

“I have enjoyed all my previous jobs, met some excellent mentors, and acquired a lot of skills across the board. However I have always had a strong interest in both accommodation properties and small business. The time was right for me to pursue my own business,” he said of his recent purchase off-the-plan of the management rights to the very impressive new Glass Factory Apartments in Brisbane’s vibrant inner city West End. Werner is certainly well equipped to take on the multi-dimensional management rights role. It was actually an accommodation business that initially brought him to Australia from News Zealand in the late 80s, when he established and ran backpackers properties in Surfers Paradise and Caloundra.

But opportunities in the corporate world beckoned. He went on to work at Herron Pharmaceuticals for 16 years, until the company was sold in 2003. He was then integral to the development and growth of another family company, Rain Harvesting, before returning to the pharmaceutical sector in 2011.

During this time, however, Werner still pursued his interest in both business and accommodation – through investment (freehold ownership of the Moree Motel in NSW, 2006-11), and establishing a florist and gift shop business operated by his wife Jenny “Management rights is a great fit for me because the two aspects of the industry complement my strengths,” he said. “I enjoy being active and hands-on, so the caretaker component of the job is welcomed. But importantly, the solid skill set I’ve acquired in the business world – sales, marketing, finance, administration, and IT – equip me with experience and know-how vital to manage and grow the management rights business.

“I have to admit,” Werner said, “working with my wife to set-up and handle all the bookkeeping and back office for her business made me envious, and I wanted to do something for myself. There is something incredibly satisfying about being your own boss.”

increase in rent pursuant to the Consumer Price Index on an annual basis. Rents are calculated on different methods.

One method to calculate rent is to take 25 - 27% of annual accommodation and sundries turnover, plus no more than 8% of annual turnover for food and beverage.

Another method of calculation involves estimating rental as approximately 45% of net profit of the business.

It can be dangerous to calculate rent on turnover because there may be other sources of income which may not result in additional net profit, eg sales of theme park and tourist attraction tickets.

These percentage formulas are approximate and will vary from property to property.

EDITORIAL

Term of lease

Newcomers to the industry want to be your own boss?

BY DAVID BURROUGH HILLHOUSE BURROUGH McKEOWN

What are the issues to consider when buying a leasehold motel business?

As a solicitor practising in the accommodation industry, this is a question which I am regularly asked by people in the industry and people considering joining the industry.

The commercial answer to the question is that the net return on a leasehold property is much higher than that on a "freehold going concern" and the entry cost is comparatively low

Suited to a lifestyle

Purchase of a leasehold property is popular with people (usually husband and wife teams) entering the industry for the first time. Before the decision is taken, intending moteliers need to think very carefully whether they are suited to a life in a particularly demanding service industry.

If consideration of those lifestyle questions is favourably resolved then many new entrants into the motel industry choose to buy a leasehold property.

As a purchaser of a lease you are purchasing the goodwill and chattels of the operation, not the real estate and buildings attached thereto. The cost of purchase of a leasehold business is approximately one third of a freehold going concern yet the returns are considerably higher.

Consult with experienced adviser

It is very important when considering the purchase of a leasehold property, that an intending purchaser consult with a real estate broker and accountant, who is experienced in understanding the industry formulas which apply in the purchase of leasehold properties.

Rent

Rent under the lease is paid calendar monthly in advance and usually there is provision in most new lease documents for an

Leases generally run for an initial 10 year term with four options of five years each, capable of being exercised by the Lessee of the property.

There is potential for capital growth with respect to leasehold properties, particularly where a new owner is able to increase turnover and therefore net profit of an operation. Rents generally speaking are not related to turnover and therefore an increase in net profit is enjoyed by the proprietor of the motel rather than the landlord.

An increase in net profit means that on disposal of the property (note the industry average for turnover is about 3 years for each owner of a motel) will result in the vendor of a business enjoying an increase in the value of the goodwill for which he is able to sell the property.

This is particularly so where there are still a good number of years left to run on the lease. Because of the higher return in respect of these properties as compared to freehold going concerns, one must consider the time honoured investment slogan "Risk equals return".

Understand lease document

It is important that potential Lessees understand that their occupation of the motel is controlled ultimately by the landlord through the Lease document. It is essential prior to purchase of the business that the purchaser understands as much as possible about the Lease document and how it works.

Not only does this document affect his own activities in the motel business, but it is also is an important part of the asset which is sold when the motelier decides to move on to another property.

Remember the Lease document on the sale of the motel will be carefully scrutinised by an incoming purchaser and his solicitor to ensure that the new buyer is adequately propertied.

It is essential that the document be analysed by the purchaser and his consultants so that the motelier > Continued on page 46 resortbrokers.com.au

43

FH

Enormous returns in the heart of Western Australia’s goldfields This fully refurbished property offers a unique opportunity in one of Western Australia's premier mining areas.

The 41 room property is the hub of the area and caters to a strong corporate, mining and tourist clientele.

The motel also features a thriving licenced restaurant and café that is frequented by guests and passers-by and offers the best a-lacarte meals in the area.

The current vendors have done a wonderful job rejuvenating the property with a full refurbishment of the rooms including carpets, tiles, bedding, TV’s, furniture and paint.

If you are looking for a motel that is in great condition with a solid business and fantastic returns this is the opportunity you’ve been waiting for.

• Fully refurbished 41 room motel • Spacious four bedroom, two bathroom fully self-contained residence • Licenced 60 seat restaurant • Solid corporate, mining and tourist clientele • Pool and outdoor dining area • Highway frontage and large grounds • Successful licenced restaurant and café In conjunction with Accommodation West Pty. Ltd

The property also offers a spacious four bedroom, two bathroom fully self-contained residence that can cater for small and large families.

Coolgardie, an historic gold mining town, is 550 kilometres east of Perth. The Goldrush Motels are located on the main street - from here it is just a short stroll through this historic gold mining town and its heritage buildings.

Nett: $404,145

Price: $1,995,000 resortbrokers.com.au/motels-for-sale/FH003212

Shane Wynhoven Broker Mobile. +61 424 174 592 Email. shanewyhoven@resortbrokers.com.au Sydney office. 02 9904 8224 44

resortbrokers.com.au

Exclusive LH

Join the Quest Serviced Apartment team with this high netting complex This magnificent serviced apartment complex provides an opportunity for serious accommodation operators to join the ever successful Quest team.

Featuring 69 x studio, one, two and three bedroom apartments and boasting a magnificent conferencing facility (capacity 70 people).

The complex is located off the main road in a quiet street opposite Victoria Park Lake and only 200 metres from Shepparton’s CBD. Located in Victoria’s Goulburn Valley widely known as the ‘Food Bowl of Australia’, Shepparton is a large commercial centre supported by many industries.

• 69 high quality serviced apartments • Mix of studio, one, two and three bedroom self-contained apartment • Lift access to all floors • Completely secure, gated carpark • Quiet location but only 200 meters from the CBD • On-site gymnasium • Large conferencing facility (70 people) • Located in the large commercial centre of Shepparton • 25 year lease, showing excellent return

The property is located centrally to a large number of leisure, sporting, cultural and conferencing venues including SPC factory outlet, KidsTown, Shepparton sporting precinct, Shepparton Art Museum, Shepparton public and private hospitals and more.

Nett: $485,376

Price: $2,225,000 resortbrokers.com.au/motels-for-sale/LH003302

Jim Chapman

Gerard Hurry

Broker

Broker

Mobile. +61 413 444 782

Mobile. +61 417 250 211

Email. jimchapman@resortbrokers.com.au

Email. gerardhurry@resortbrokers.com.au

Melbourne office. 03 9347 3100

Melbourne office. 03 9347 3100 resortbrokers.com.au

45

EDITORIAL

Mike O'Connor INFORMER COLUMNIST

Freedom more than

just another word

The advantages of being self-employed first dawned on me as I dashed down Queen Street, tie flapping at my neck and coat billowing in the breeze.

The City Hall clock tolled the hour as I hauled on the bannister and vaulted up the stairs to the first floor, grabbed the card bearing my name and slammed it into the machine.

Kerching! The time clock had spoken, 9.02 imprinted in red ink on the card. Late again.

I was a bank clerk, my first job after finishing high school and my employer took a dim view of workers who were not bent diligently over their ledgers by the official starting time of 9am.

I’m self-employed now but it took more than 40 years after that first encounter with the time clock to achieve this, which would indicate that I am a rather slow learner.

I left the bank after 18 months to the delight of the accountants who at the end of each month had to untangle everything I had done for the preceding four weeks.

All my mates from school were doing courses that would eventually lead them into their own businesses, but my father worked for wages and impressed upon me the need to have a steady, secure job. The bank or public service - these were the aspirations of school leavers at that time.

I escaped the bank and was fortunate to get a journalism cadetship on a newspaper.

I stayed with it, in various forms, until two years ago, working for a salary.

It was a good life but I will always 46

resortbrokers.com.au

wonder what would have been the outcome if like my mates, I’d headed out on my own and become self-employed. The thought first occurred to me when to earn money to travel overseas, I started driving cabs on the weekends.

I met a man not much older than me who already owned two cabs and who told me I should take out a loan and buy one. "You’ll make serious money,’’ he said. "I’ll think about it,’’ I said and went overseas for a year and spent every cent I possessed having a wonderful time.

I caught up with him a few years later and he was well on the way of achieving his ambition of owning a fleet of taxis.

Another school friend became a mechanic and quickly realized he’d never make a lot of money hanging off the end of a spanner.

He tendered for a job to clean roofs and then to clean Australia Post vans. Later he tendered for a building demolition contract.

He then ventured into earthmoving and borrowed to buy some heavy equipment.

He took delivery of his new boat a few months ago. I haven’t seen it yet but it cost $1.25 million so he’s doing just fine working for himself.

"We should have teamed up all those years ago,’’ he said. "Should have" I said, images of me swilling champagne on the deck of my very large and appallingly ostentatious boat dancing in my mind.

Then I met and married my second wife who runs her own business, one to which my journalistic skills are suited.

"If we’d teamed up years ago, we would

have made a lot of money," she said.

Then we both met Ian Crooks, the managing director and founder of Resort Brokers Australia which publishes this magazine.

He told us about the advantages of motel leasing and that night we both had the same thought.

"We could toss everything in and take on a motel lease in the bush, work hard for a couple of years and then move on," I said.

"We’re too old for it now," she said, "or at least you are.’’

"If we’d met years ago we could have gone out on our own in the motel business," she said.

"I know," I said, "and we would have made a lot of money."

"Something like that,’’ she said and turned off the light.

The Iarger part of my career may now be behind me but I’m finally working for myself as a freelance. No more office politics, no more sitting in a large concrete box staring wistfully at the blue sky beyond and no more peak hour commute.

True, there’s the small matter of no more guaranteed salary and the paid holidays and sick leave that go with it, but on the whole I feel liberated.

The transition from employed to selfemployed bought with it some challenges but also a sense of freedom that I love.

I work at a desk at one end of our house now and my wife works at a much tidier desk at the other.

Occasionally, in a quiet moment, she will call out: "You know what?"

"What’s that?’’ I yell. "If we’d met earlier and gone into business….."

"I know’’ I say, finishing her sentence.

"We could have made a lot of money together."

Introducing...

Life in a Column

by Mike O'Connor

Mike describes his book as a collection of Back Chat articles he has written for the Q Weekend Magazine, in the Courier-Mail. "It's a wry,amusingandsometimes poignant record of the disasterproneexistencethat has been his life," Mike says.

only

postage $25 plus

Can be ordered via mikeoconnor.com.au

Receivers’ sale

Port Douglas management & letting rights businesses Four Mile Beach, Port Douglas

FOR SALE BY EXPRESSIONS OF INTEREST: Management and letting rights businesses across ten complexes, accompanying freehold properties and plant and equipment forming the Latitude 16 Pty Ltd (Receivers and Managers Appointed) group based in Port Douglas, Qld. The businesses (with accompanying freehold properties and plant and equipment) are being offered for sale as a group, individually or in any combination.

The portfolio includes: 1. Beaches:caretakingagreement-27apartmentcomplexplusa freeholdonsitemanager’soffice;lettingagreement–currently 20 in the letting pool.

2. Mowbray by the Sea: caretaking agreement - 16 apartment complexplusafreeholdmanager’sapartmentandoffice;letting agreement – currently 15 in the letting pool.

3. Port Douglas Beachfront Terraces: caretaking agreement - 17 apartmentcomplexplusafreeholdmanager’sapartment,letting agreement – currently 16 in the letting pool.

4. Driftwood/Mantaray: Driftwood - caretaking agreement - 8 apartment complex plus a freehold manager’s apartment and office;lettingagreement–currently2inthelettingpool.Mantaray -caretakingagreement-9apartmentcomplex;lettingagreement– currently 4 in the letting pool.

5. GarrickHouse:caretakingagreement-17apartmentcomplexplus a freehold manager’s apartment and office; letting agreement – currently 11 in the letting pool.

6. Tropical Reef Apartments: caretaking agreement - 16 apartment complex plus a freehold manager’s apartment and office; letting agreement – currently 5 in the letting pool.

7. Sunseeker: caretaking agreement - 9 apartment complex plus a freehold manager’s apartment and office; letting agreement – currently 3 in the letting pool.

8. CoralApartments: caretaking agreement - 23 apartment complex plusafreeholdmanager’sapartmentandoffice;lettingagreement– currently 5 in the letting pool.

9. TropicSands: caretaking agreement - 14 apartment complex plus a freehold manager’s apartment and office; letting agreement – currently 5 in the letting pool.

CLOSING DATE FOR EXPRESSIONS OF INTEREST Friday 10th October, 2014

Shane Mullins Broker Mobile. +61 447 185 001 Email. shanemullins@resortbrokers.com.au Headoffice. 07 3878 3999

Under instructions from Shaun McKinnon and Tony Jonsson of Grant Thornton Australia Limited as Receivers and Managers of Latitude 16 Pty Ltd (Receivers and Managers Appointed)

Exclusive LH

This motel lease has it all - strong occupancy, solid tariffs and massive residence With 27 rooms, this is the largest and most modern motel in town. It boasts the only restaurant in town and is well supported well by the local population with a continuing strong trade.

The motel is conveniently located in Mitchell. When travelling from Roma, just after you cross over the Maranoa River, the property is located a short distance on the left.

The property is fully staffed by local people and has been run under management since the current owners purchased the lease almost three years ago.

• Largest motel in town • Only restaurant in town • Strong occupancy • Solid tariffs • All local staff • Consistent trader • Massive residence • Suitable for weddings and functions

The motel is well laid out and by laundering their own linen on site, is self-sufficient. There is a linen service from Toowoomba that goes to the town should the incoming lessee choose not to do the linen on site.

The residence is huge to say the least; four bedroom, two bathroom, massive lounge, dining and separate kitchen attached to the reception for ease of running the bookings and managing guests. The large restaurant is fully equipped and staffed to cater for weddings, functions, and conferencing.

Nett: $486,317

Price: $1,195,000 resortbrokers.com.au/motels-for-sale/LH003218

Lindsay Cooper Broker Mobile. +61 418 711 047 Email. lindsaycooper@resortbrokers.com.au Headoffice. 07 3878 3999 48

resortbrokers.com.au

Exclusive MR

Walton Way in The Gap - a cracker of a management rights Walton Way is a unique management rights located in The Gap. This management rights has a great body corporate salary of $110,000 per year and comes with a 5% annual increase.

The workload is very manageable and could be achieved by one person allowing the partner to carry on working.

The complex is only nine kilometres from the CBD with express transport to the city and is close to schools, shops and cafes.

Everything you need is within walking distance.

The prime location creates huge demand for the rental units at Walton Way, with the current managers have a waiting list.

With no set office hours, this complex offers a great flexible lifestyle that enables you to have time with your family. Your options are many and varied.

If you're looking for a great management rights then Walton Way is the one!

• Fantastic location • Great body corporate salary • 5% annual salary increase • Beautifully presented managers unit • Flexible workload and lifestyle • Able to be run by one person • Let this property impress you, its a cracker!

Nett: $142,000

Price: $1,217,000 resortbrokers.com.au/management-rights-for-sale/MR003240

David Janett Broker Mobile. +61 402 204 672 Email. davidjanett@resortbrokers.com.au Headoffice. 07 3878 3999 resortbrokers.com.au

49

EDITORIAL

Many faces of the accommodation industry Continuing our series profiling the many faces of Australian tourism and accommodation, we introduce you to the leaders and innovators, characters and canny operators of our industry. These are their stories.

Tony Ryan

Fervent advocate for the hotel industry

Catie Langdon RESORT BROKERS AUSTRALIA

Tony Ryan’s desk in a gleaming Singapore Tower is a far cry from the old Newmarket pub in Botany where he was first hooked by the hospitality business. But he remains every bit as enchanted by the hotel “magic” as the day he pulled his first beer.

More than 30 years on, Tony Ryan is a powerful international hotel industry advisor and legal representative, and a relentless advocate for Australia’s hospitality, accommodation and broader tourism industries.

Ryan Lawyers, with offices in Sydney and Singapore, is the largest specialist hotel advisory firm in Asia. Ryan himself is lawyer and adviser to the Property Council of Australia (PCA) and Tourism and Transport Forum (TTF), having been a director of both bodies over the past 15 years.

Yet he clearly recalls where it all began.

“I remember an old digger at the Newmarket saying to me across the bar, ‘you pull a good beer son’. They were a discerning lot. So I guess there was a future for me in hotels,” he jokes. That, and an Irish Catholic heritage populated by publicans, sealed his fate.

While continuing to work in pubs, the young Ryan studied for his Bachelor of Laws at Sydney University, and a Bachelor 50

resortbrokers.com.au

of Arts with a speciality in comparative religions (more about that later). He was admitted as a lawyer in NSW in 1984, and worked briefly as an associate for a judge in the Land and Environment Court, sparking an interest in property and development.

Then, in a move that would shape his career, Ryan joined law firm Blake Dawson (now Ashurst) where he was able to combine two growing interests, property law and the liquor licensing field he’d come to know well while managing pubs.

Working on one deal would prove a career watershed – the 1988 acquisition by the Pritzker family (of Hyatt fame) of Southern Pacific Hotel Corporation.

“It involved about 60 hotel properties and something like 140 management agreements,” Ryan recalls. “It opened my eyes to a much bigger industry than the corner pubs I was dealing with.”

An idea germinated, the novel concept of an industry-based specialist practice.

‘Novel’ because, to that point, law firms were broadly skills-based – tax, family law, criminal law, and so on – rather than being focused on expertise in a particular industry.

Ryan put together an integrated tourism and hospitality legal practice, handling everything from industrial relations, sales and acquisitions, taxation, to intellectual property (trademarks and brands), and licensing. He launched it at Blake Dawson in 1992, the same year he made Partner.

“We had to know our clients’ businesses inside and out, to know the numbers, every aspect – operations, sales, F&B supply, customer relations – the

whole commerce of hotel development and operation. It became our point of difference.”

Ryan did a number of courses in the industry, even heading to freezing upstate New York in the dead of winter to do the Advanced Management Program at Cornell University’s Hotel School.

“They were bemused and impressed at this Aussie lawyer turning up, but it’s been invaluable, another huge eye-opener as to the size of the sector and what drives it.

The Cornell alumni has also given me an amazing industry network.”

Ryan’s specialist team developed an impressive client base of owners and operators – Hyatt, Marriott and Starwood among them. Highlights were his cradleto-grave involvement in Sydney’s landmark ANA (now Shangri-la) Hotel development, advising on accommodation issues for the Sydney Olympics bid, and the Four Seasons Hotel (former Regent) acquisition, and seeing it through a $60m upgrade in time for the 2000 Olympics.

“Another major deal, the early nineties float of Accor Asia Pacific, really exposed me to the Asian hotel business,” Ryan explains. “Australia’s hotel industry, at the bigger end of town, is really built on offshore capital. First it was the Japanese, then Singapore and Malaysia, now China and the Middle East. We were working on negotiations across a vast area, from Myanmar to Vanuatu.”

It was against this impressive background that Tony Ryan launched his own business in 2004. “It was a chance to operate more broadly,” he says, “to have a different role, not just a legal adviser, but more a corporate adviser.”

He describes Ryan Lawyers as ‘a gateway to deals, finance and business opportunities’. “We provide strategic and practical advice, assisting clients to grow their local and international businesses through both corporate and asset acquisitions.”

In response to increasing offshore demand, and because opportunities for growth in corporate and legal services are relatively limited in Australia, the firm has expanded to Asia. Surprisingly, he says, there were no specialist hotel and tourism law firms in Asia.

In 2012, with Robert Williams joining as principal to operate the Sydney office, Ryan moved to Singapore. He is relishing the change and is clearly excited about the next phase of his career.

“It’s a challenge, a whole new market, but we have great support from our clients.

It was a case of lifting the horizon again.”

With three grown daughters now attending uni in different cities around Australia, he also jokes the Singapore move might be a “way of dealing with my increasing irrelevance.”

Ryan’s relevance in the tourism and accommodation sector could never be in question. Since opening in Singapore he’s been working far and wide – Korea, Thailand, Indonesia, Malaysia, China, Vietnam, Myanmar and India included. In just two and half years, he’s done six major hotel deals in the Maldives alone.

“Commercial business issues tend to be the same, regardless of location,” Ryan says, when asked about difficulties of working in diverse legal jurisdictions.

“We have the ability to negotiate, to draft legal documents. We understand how to

sell a ‘live’ business. A network of local counsel helps us to work within the various countries.”

Informer marvels that Ryan, working at such a level, still finds time to contribute much to the industry. On top of his deep involvement with the PCA and TTF, he established the PCA’s first National Tourism Committee, has initiated and supported accommodation supply and demand studies across Australia, and worked closely with a major consulting firm on a significant piece of work on labour costs, getting the ball rolling on enterprise bargaining.

Ryan also helped to establish, and now sponsors, the IPD Australia Quarterly Hotel Property Index which tracks the investment performance of hotels using a methodology comparable to those used for the office and industrial property categories.

“I see it as vital to engage strongly and I’ve given a lot of time to the sector.

The key objective has been to establish hotels as a respected asset class, and to continually raise the profile with government of tourism as a critical industry,” he said. “It is gratifying now to see that happening, with tourism clearly identified as one of our key economic pillars.”

Meanwhile, he pursues the enormous business opportunities presented in the growth hub of Asia. “The scale of growth is phenomenal,” he says. “To give you some idea … I was involved in Barangaroo (Sydney’s largest long-term redevelopment project worth over $6 billion). In Jakarta at the moment, there are probably four Barangaroos.”

It’s true that work is a very large part of Ryan’s life. And it involves a great deal of travel. But he does make time to switch off. “I try to build in time wherever I go to experience the place, so it’s not all business. I’ve long been fascinated by Asian cultures. My comparative religions study back at uni was on Hinduism and Buddhism. I’ve been collecting Asian artefacts for years.”

When Ryan really wants to switch off, he tries to travel off the beaten track without staying in a single hotel. Hotels, after all, are his primary work focus. But his fascination for them endures.

“There is something about the hotel business that holds people to it. Hotels are different to other property classes.

They are living entities, day and night, with hundreds of staff who need to fill that hotel with guests every day.

“They create a special magic every day.

I find it fascinating.”

Gold Coast's time to shine

Alex Cook RESORT BROKERS AUSTRALIA

Billions of dollars in investment are flowing into the Gold Coast marking a spectacular return to fortune for Australia’s favourite resort city. The glitter strip has its mojo back, and you can sense the confidence in the sea air.

Month after month we are learning of new project announcements, as the Gold Coast rebounds strongly and prepares to put its best foot forward when it hosts the 2018 Commonwealth Games.

The icing on the cake was last month’s announcement by Echo Entertainment that it is kicking off a massive $345 million expansion of Jupiters Hotel & Casino. The plans, which will transform the Broadbeach property, are music to the ears of anyone with a stake in the Gold Coast’s tourism industry.

Echo has committed to deliver a sixstar luxury hotel tower, new restaurants and bars to include outdoor areas, and a complete revitalisation of the existing 592 room hotel and facilities. They’ve promised to have the new hotel completed “six to nine months” before the 2018 Games.

Meanwhile, over the road, AMP Capital is making progress with its $670 million three-year redevelopment of Pacific Fair.

The shopping centre, which in its day was one of Australia’s iconic retail destinations, will once again be a ‘must visit’ attraction for domestic and international visitors.

Some ambitious ‘big ticket’ developments are still in the planning stage, including the Broadwater Marine Precinct with its mooted cruise ship terminal and second casino, and a largescale arts and cultural precinct across the river from Surfers Paradise. > Continued on page 65 resortbrokers.com.au

51

Exclusive LH

Tempting Tasmanian tourist treat - motel and caravan park Live the dream with this motel and caravan park on the north west Tasmanian coast, offering an all round and growing established business. Situated opposite a beautiful sandy beach, benefiting by being highly visible, yet away from the hustle and bustle of a city, this is a popular destination for the traveller.

The motel component of the property consists of 11 x one and two bedroom rooms and the caravan park boasts 12 x family cabins, 4 x two bedroom deluxe cabins, 37 x powered sites and 10 x tent sites.

All motel rooms and cabins are self catering.

• Excellent manager's two bedroom, two bathroom house • Brilliant opportunity for purchaser demanding constantly improving turnover • 25 year lease offered with market rental

Nett: $286,849

Price: $775,000 resortbrokers.com.au/motels-for-sale/LH003322

Jim Chapman Broker Mobile. +61 413 444 782

Melbourne office. 03 9347 3100

Email. jimchapman@resortbrokers.com.au

Exclusive LH

Mid north coast leasehold that ticks all the boxes After seven years operating under the same management, the current manager's have decided to move onto their next venture.

Given these circumstances, the owner is meeting the market with a realistically priced opportunity offering a shiny new 30 year lease and rent which is precisely where it should be.

The property consists of 28 ground floor renovated rooms, all 3 and 4 star standard, in a prime location on the edge of town centre within walking distance to local amenities. It offers a comfortable residence with open plan living area, two bedrooms upstairs with extra bedroom option.

• High repeat corporate trade • Opportunity to drive restaurant revenue - currently bed and breakfast focused • Future potential option to purchase freehold

Nett: $221,824

Price: $695,000 resortbrokers.com.au/motels-for-sale/LH003286

James Carrick Broker Mobile. +61 400 664 065 Email. jamescarrick@resortbrokers.com.au 52

resortbrokers.com.au

Sydney office. 02 9904 8224

Exclusive LH

First timer’s delight - leasehold offering The Creswick Motel is an ideal opportunity for those entering the accommodation world for the first time or the experienced motelier seeking a laid back lifestyle with an ‘easy to run’ business.

Featuring 10 x 3 star, ground floor motel rooms of differing configurations, the Creswick Motel is a very neat, well maintained property in an excellent country town. Creswick is located 129 km northwest of Melbourne and only 18km from the huge provincial centre of Ballarat. The town is home to the University of Melbourne School of Forestry, has three primary schools and a large Aged Care facility.

• • • •

On-site parking for all units, extra area for trailers etc High profile main corner location Large three bedroom residence Central to Ballarat, Daylesford and Maryborough

Nett: $98,059

Price: $330,000 resortbrokers.com.au/motels-for-sale/LH003272

Gerard Hurry Broker Mobile. +61 417 250 211

Melbourne office. 03 9347 3100

Email. gerardhurry@resortbrokers.com.au

Exclusive LH

Resort like central Victorian serviced apartment leasehold Be a part of the desirable Quest Serviced Apartment franchise.

This property consists of 38 x 4 star serviced apartments all with quality furnishings and fittings, comfortable living/dining areas, bathrooms, laundry and either a balcony or terraced area.

The facilities include a reception area, conference room, inground swimming pool, BBQ area, on-site parking and beautifully maintained, resort like garden and lawn area.

The Quest model means that substantial support systems are there to help you every step of the way. This property will appeal to an astute purchaser looking to increase nett profit and drive up value.

• Constructed in 2000 • Beautifully maintained and presented • Ideal for a hands on operator • Secure Lease. Market Rent

Nett: $69,018

Price: $400,000 resortbrokers.com.au/motels-for-sale/LH003260

Jim Chapman Broker Mobile. +61 413 444 782

Melbourne office. 03 9347 3100

Email. jimchapman@resortbrokers.com.au resortbrokers.com.au

53

Exclusive MR

Receivers' sale - Surfers Hawaiian management rights & managers unit Surfers Hawaiian is situated on the Nerang River, approximately a 20 minute walk to the shops, restaurants and nightlife of central Surfers Paradise. Jupiter's Casino and the Gold Coast Convention Centre are a short drive into Broadbeach. The new Gold Coast Light Rail passes the front of the property. any rooms offer ocean views and the 14 storey high-rise is surrounded by wellM maintained tropical gardens. On-site facilities include heated swimming pool and wading pool, two spas and sauna, gym, BBQ area, marina and boat ramp.

• BC salary of $85,000 (as of 31/8/14) • Two bedroom, one bathroom manager's unit • Reception and office on title • Newly refurbished on-site restaurant (separate lease) • Lot 2, BUP 9648 • Located at 2890 Gold Coast Highway

Nett: $130,000 (estimated)

Expressions of interest resortbrokers.com.au/management-rights-for-sale/MR00333

Alex Cook Broker Mobile. +61 467 600 610 Email. alexcook@resortbrokers.com.au Headoffice. 07 3878 3999 54

resortbrokers.com.au

Exclusive LH

Lucrative leasehold in sought after Sydney enormous growth opportunities await This Sydney leasehold is a fabulous opportunity not to be missed.

This property is a rare opportunity to secure a lucrative leasehold in highly sought after Sydney. The motel is an immaculate 51 room property that has been fully refurbished and is an outstanding performer.

• 51 room and apartments • 3.5 star rated • Recently refurbished • Swimming pool and new BBQ area • Breakfast only • 45 minutes to Sydney CBD • Three bedroom residence • Cafes, restaurants, shopping on your doorstep • Ample parking for cars, trucks and buses

The property features motel and apartment style rooms that are 3.5 star AAA rated. The motel can accommodate a wide range of guests with double, twin share, family and queen rooms, two bedroom suites, spa suite and self-contained apartments.

Offering a comfortable manager's residence with three bedrooms, one bathroom with spa, private kitchen and living area, the property has a separate manager’s office that can also be utilised for conferencing. There is a brand new BBQ and picnic area, as well as the salt water pool which has also had a recent makeover.

The property is simple to run with only breakfast requirements, with ample food and beverage options nearby and more restaurants and retail options currently being developed.

Nett: $508,907

Price: $1,950,000 resortbrokers.com.au/motels-for-sale/LH003319

Shane Wynhoven Broker Mobile. +61 424 174 592 Email. shanewyhoven@resortbrokers.com.au Sydney office. 02 9904 8224 resortbrokers.com.au

55

Exclusive LH

Resort style living in busy Rockhampton with this award winning motel An outstanding 30 unit motel leasehold, with a main road position in stable Rockhampton complete with modern residence. The small 18 seat in-house licensed restaurant has a beautiful outlook over the in-ground pool and gardens. There is also a large area for outdoor dining and barbecues or just a spot for family relaxation.

The conference centre is situated opposite the reception, which makes for easy service of morning tea etc. This room is also stocked with the necessary conference equipment and can cater for up to 80 delegates. The property is fully renovated including building and rooms. New signage to the highway makes for a grand presence for travellers.

• 30 units including a family unit • Resort style pool set in beautiful gardens • Unique conference centre • Presently run under management • Property fully renovated, interior and exterior • Main road position next to busy tourist attraction • Very low rent for a 30 unit motel • All ground floor units with covered parking

The motel is opposite the university and enjoys business from there as well as the usual corporate, mining and tourism. The Capricorn has a 3.5 star rating.

The spacious reception area has modern equipment, as well as a back office for privacy and an additional room used for relieving managers and day rest.

Nett: $256,480

Price: $860,000 resortbrokers.com.au/motels-for-sale/LH002854

Len Booth Broker Mobile. +61 438 139 422 Email. lenbooth@resortbrokers.com.au Headoffice office. 07 3878 3999 56

resortbrokers.com.au

Exclusive LH

Now is the time to buy this outstanding Darling Downs leasehold opportunity The Chinchilla Great Western Motor Inn is a charming 26 unit motel set amongst beautiful grounds and gardens. The venue has licensed restaurant, in-ground swimming pool and a spacious three bedroom residence.

A beautiful property with an endearing western homestead appeal, the rooms are housed in four separate buildings with the restaurant and residence in the fifth. The gardens and lawns are immaculate and designed to be low maintenance.

The managers accommodation is a three bedroom residence which is situated behind the reception. There is a large living and kitchen area and a private back outdoor area for entertaining family and friends.

• Spacious three bedroom manager's residence • Brand new 30 year lease • DA in place to build 16 units (stage one) and then a further 16 (stage two) • Licensed dining room • In-ground swimming pool • Car rental agency • Liquor license • Showing an impressive 34% return • Rent set at an extremely acceptable level • Currently run under management • Outstanding opportunity to get into Chinchilla

Nett: $478,000

The motel caters for the travelling tourists but receives most of its income from the corporate sector.

Now is the time to act as the town is about to ramp up stage two of the gas development getting into full swing in late 2014.

Price: $1,395,000 resortbrokers.com.au/motels-for-sale/LH003194

Steve Campbell

Lindsay Cooper

Broker

Broker

Mobile. +61 407 727 194

Mobile. +61 418 711 047

Email. stevecampbell@resortbrokers.com.au

Email. lindsaycooper@resortbrokers.com.au

Headoffice. 07 3878 3999

Headoffice. 07 3878 3999 resortbrokers.com.au

57

EDITORIAL

BY MIKE PHIPPS MIKE PHIPPS FINANCE

Taking the Leap

Like many before me I spent most of my working life in the employ of others. In my case that's 33 years working in banking and finance. 5 years ago I took a very deep breath and started a finance broking company from scratch. 5 years on we do more accommodation asset finance volume than just about anyone else and we have a pretty solid business. Who'd have thought?

Like many who work for a big company I got somewhat institutionalised within the perceived safety and security of the job and obviously very reliant on the regular pay cheque. It's scary and confronting to walk away from that but believe me it's the best

What are the Issues to consider when buying a leasehold motel business? Continued from page 43 understands what costs he will be responsible for in relation to the property.

It is a feature of most well drawn modern Leases that responsibility for maintenance and upkeep of the motel is very much left to the tenant.

The rationale behind this is that the motelier does not want his business suffering whilst he waits for a tardy landlord to effect repairs to the property. It is far more desirable that the motelier be in control of the maintenance of his own building so that his business is not adversely effected.

The results of the analysis of the Lease 58

resortbrokers.com.au

thing I ever did.

Many of our clients go through the same stress and angst of making the decision to have a go at being self employed and frankly we often end up being more councillors than finance brokers. That's fine by me.

The great news is that if you are looking to take that first big leap into business and you are reading this article chances are you are thinking about managements rights, a motel or a caravan park. These businesses are perfectly suited to first time business people because they don't carry many of the risks that can send the inexperienced broke. The banks recognise this which is why finance is so readily available to assist purchasers and a lack of prior experience is rarely an issue.

Why is it so ? The key business risks in terms of cost to the tenant could be conveyed to the purchaser's accountant prior to any Contract for the purchase of a property becoming unconditional.

Investigate viability

An experienced accountant should investigate the viability of the business on behalf of an intending purchaser. Most contracts for the purchase of the leasehold motel contain a clause allowing the purchaser's accountant to prepare a "due diligence report" on the financial state of the business. This is an important protection for the purchaser.

Purchase price

Another important factor to consider when

for going concerns tend to centre on management, purchase demand, bad debts, supply risk, cash flow timing, stock control and working capital. Of these management, cash flow and working capital are, in my view, the most critical. The other key risks are either non existent or very low in the accommodation sector, hence the support we see from the banks. Cash flow risk , provided occupancy and tariff are managed, is also very low. The guest books, stays and pays. There is virtually no cash flow timing lag between the use of the product you are selling and collection of revenue.

So, provided an appropriate working capital allowance is made by way of cash reserves or an overdraft all should be well.

That just leaves management. There is nothing technically difficult about operating these accommodation based businesses.

No specialist skills or qualifications are essential, although obviously a background in sales and marketing is a great start.

Some of our most successful clients came into the industry years ago with no background in accommodation management but with a sound common sense approach to presentation and guest service. Some of them have literally made millions and more importantly none of our clients have gone broke.

Ultimately , if you work for wages my belief is that you build value and wealth for someone else and can end up after years of solid slog with nothing to show for your efforts outside of what you have managed to gain from your wages. Being self employed means that every minute you work has the potential to add value to your asset. It's liberating and if you are used to working within a large company the absence of focus group and strategy meetings and having to go through a dozen channels to get anything done will set you free. It's your business, you make the decisions and you manage the results. Its a great feeling to see your business grow through your own efforts and I'd recommend the experience to anyone who wants to get ahead.

purchasing a motel property is that because there is no freehold interest over which a lender can take security, the purchaser of a leasehold property requires a greater percentage of the purchase price from his own sources than in the case of purchasing a freehold property.

It is also essential to accurately assess with the assistance of your consultants and an experienced broker, the ongoing cost of the transaction including stamp duty on the Contract of Sale (and possibly on the Lease document if a new lease is being entered into), the first month's rent in advance, insurance, legal and accounting costs and borrowing costs.

Can be ordered via mikeoconnor.com.au

Financial strategies for small business operators - Continued from page 36 return. The property investor can claim the depreciation of the investment property against taxable income and in turn results in the property investor paying less tax.

There are two main elements to claiming a rental investment property deduction: Plant and equipment (Division 40) – is part of the legislation that covers the depreciation of “plant and equipment”.

That is, the removable fixtures and fittings within an investment property. Each plant and equipment item has an effective life set by the Australian Taxation Office and the depreciation deduction available on that item is calculated using this effective life.

Capital Works Deduction (Division 43) – also referred to as “Capital Works Allowance” or “Building Write-Offs”, Division 43 covers the deductions available to owners for the structural elements of a building and the items within the property that are deemed irremovable. Properties qualify for this allowance depending on their age and type, either 2.5% or 4% of a property’s historical construction cost or estimated cost can be calculated by a professional such as a Quantity Surveyor.

BY GLENN MILLAR RESORT BROKERS AUSTRALIA

When these assets are not classified correctly, money is lost in the early financial years following the purchase. Often the obvious assets are classified as Division 40 and the more inconspicuous items are sometimes overlooked. This often results in them being combined with Division 43 and claimed at 2.5% instead of the much higher rates based on their effective life.

That may mean a significant difference in the deduction for the property investor.

Estate Planning Strategies

Estate Planning – is more than just having a will. It is about ensuring that a person’s estate is passed on to their beneficiaries in the most tax effective and financially efficient manner possible when they are gone.

Getting early advice on setting up an estate plan can help you to achieve peace of mind in knowing that your wealth will be passed on in the most tax effective way and ensure it is carried out according to your wishes, which is often a problem with a simple will.

An estate plan maximises your assets and takes into account other non-financial matters, such as the care of dependent children, medical treatment and accommodation if you are incapacitated. It

" You've got to know when to hold 'em know when to fold 'em know when to walk away, and know when to run" Kenny Rogers

One of the most frequently asked questions when doing my rounds seems to be, ‘what's the market like’ or ‘when's the best time to sell?’ It's often hard to know when the time is right, when you business is at its prime and when the stars have aligned. Some owners spend years working towards a specific goal or date in view of an eventual payday, for others – as blasé as it sounds – the time simply comes to sell up and move on.

That's often not an easy decision to make; you ask yourself whether the business is at its peak, whether you

might backtrack in the near future, and also whether there is sufficient upside in the business to attract purchasers. If your goal has always been to sell your business at the peak of its earning potential and performance, recognition of one or two of the following scenarios might spark you into doing some mental packing right now.

Essentially, if you want to sell your business and achieve the optimum multiplier possible, it is important to demonstrate future growth potential. Yes, buyers are interested in past performance. However, regardless of how good it may have been,

also considers your charitable, community and cultural requirements.

If you pass away without a will, your assets are distributed by following a standard statutory formula and it is likely that distribution will not play out the way you would have liked.

For those who do have a will, it may only cover what to do with your personally owned assets and other considerations like superannuation, trusts and business assets may have been left out.

In developing an effective action plan for dealing with your estate, the following considerations should be made: • How will your business wealth be dealt with?

• How should your superannuation be dealt with after your death?

• Who is to receive your gifts and legacies, and when should they be given?

• Who will be appointed executors of your will?

• Who will control your non-estate wealth holding entities, including family trusts?

An estate plan is something that should be considered, no matter how young or old you are.

incoming owners will generally always look forward to where the business is going. After all, with entry costs and stamp duty on the way in, and exit costs and commissions on the way out, operators generally need to increase the value of their business by about 10% by the time they sell in order to maintain their equity level.

As stated above, there could be a number of reasons why now could be the right time to sell your business. Like most aspects of business though, this too requires a strategy that takes a number of different factors into account. As one might expect, businesses experiencing a trend of growth are always attractive to buyers. They tend to achieve more enquiries, sell quicker and sell for higher prices. The irony of this is that in situations when a business is most ripe for selling, the owner is the least likely to sell.

This isn’t necessarily a bad thing of course; if everybody sold their business as soon as it exhibited signs of growth, nobody would ever make any money. The point is; if you are thinking of selling, you shouldn’t wait until your business has reached its apogee or, worse still, is starting to show signs of decline. Buyers will pick up on this, and it will make it all the more difficult to sell.

Is the timing right? Will the market improve if I wait? How much more money could I get in a year’s time? As a general rule, the best time to sell is when your business has experienced good growth, but still shows clear signs that this growth will continue.

Quite simply, buyers are prepared to pay a lot more for a business that is on the rise. resortbrokers.com.au

59

AGENT PROFILE

Russell Rogers SOUTH COAST NSW

OUR AGENTS PRIDE THEMSELVES ON THEIR LOCAL KNOWLEDGE. THEY EACH LOOK AFTER A GEOGRAPHICAL PATCH, AND GROW TO KNOW IT INTIMATELY. WE FEEL THIS ADDS GREATLY TO THE CONFIDENCE WITH WHICH A PROPERTY CAN BE SOLD. IN THIS FEATURE WE WILL GET SOME THOUGHTS ON THEIR LOCAL AREA AND WILL ALSO LEARN A BIT ABOUT THEIR PERSONALITIES. HOW LONG HAVE YOU WORKED AT RESORT BROKERS AUSTRALIA?

tradespeople. It is a physically spectacular part of Australia with strong growth prospects.

WHAT DO YOU LOVE MOST ABOUT YOUR JOB?

I have been with Resort Brokers Australia for three years, I started in September 2011.

TELL US ABOUT AN ISSUE WITH A SALE THAT YOU HAVE OVERCOME AND WHAT YOU LEARNT FROM THAT?

The real highlight for me is the constant interaction with people from diverse backgrounds. I genuinely enjoy hearing people's stories and the different paths that have led them to the tourism industry. I also enjoy being on the road, staying in first rate accommodation and eating great food!

WHAT IS YOUR BACKGROUND? I am a mechanic by trade, and moved to the South Coast of NSW over 30 years ago with my wife to own and run a service station. Since then I have operated a number of different businesses including an abalone fishing license. My wife and I have also owned and operated several motels, including one we still own in SouthWestern NSW. My background, particularly my exposure to the tourism industry as a motel owner/operator gives me a unique perspective when negotiating deals.

TELL US ABOUT YOUR MY AREA My zone is the South Coast and Riverina areas of NSW, the major industries are: tourism, farming, commercial fishing and forestry. These industries provide a constant demand for accommodation through corporate reps, tourists and

I felt a deal was lost due to a lack of understanding by the acting solicitors. I don't believe they had a comprehensive knowledge of the industry, thus making the deal unnecessarily complicated. I have learnt that using lawyers who have a proven track record in tourism brokerage makes for a much smoother and efficient transaction.

WHAT HAS BEEN YOUR BIGGEST SUCCESS SINCE STARTING AT RESORTBROKERS AUSTRALIA? I would consider my biggest successes to date to be the sale of a manufactured home village and large caravan park close to home, both early in my second year, then being awarded the most improved broker award in our company.

WHAT ANNOYS YOU? Being booked for speeding or parking!

DO YOU HAVE A NICKNAME? Not that I can put in print.

WHAT DO YOU DO IN YOUR SPARE TIME? I am a fairly typical coastal dweller, I enjoy fishing, snorkelling and walking on spectacular Narrawallee beach.

RESORTBROKERS.COM.AU 60

resortbrokers.com.au

60

Regional Snapshot - Darwin, NT WE SHINE A SPOTLIGHT ON KEY REGIONS TO REVEAL WHAT IS DRIVING TOURISM AND ACCOMMODATION INDUSTRY GROWTH

Darwin, capital of the Northern Territory, sits at the edge of a harbour bigger than Sydney’s. It is Australia’s northern-most city, and arguably its most cosmopolitan.

The Federal Government’s Asian Century White Paper has singled out Darwin as the capital of Northern Australia, with the potential to evolve similarly to Singapore.

Also presenting significant economic opportunity is an increased US military presence. By 2017, as many as 2500 US Marines will call Darwin home. The positive flow-on effect to the commercial sector cannot be underestimated.

Tourism & hospitality output surge

From 2008 to 2013, tourism and hospitality While retaining its relaxed charm and rich industry output (sales) in the City of Darwin multicultural character, Darwin has become climbed from $706 million to $1,064 million, a highly sophisticated, modern centre. It up more than 50%. In value added terms, is a vibrant leisure, shopping and dining the growth was more than 64%.* destination and launch pad to the Territory’s Tourism Research Australia statistics world-class natural and cultural attractions. show the total number of overnight visitors Darwin is the centre of NT commerce, to the NT increased by 1.1% during the 12 business and administration, and main months to March 2014, driven by rising service centre for industries headed by international visitation and stable domestic mining, offshore oil and gas production, visitor numbers. Notably, business visitation agribusiness, tourism, education rose by 24%. Visitor numbers to and defence. It is Asia’s Greater Darwin rose 4.3%. gateway to Australia,

In 2012-13, the tourism In the last decade gross a thriving hub whose sector contributed $1.7 regional product has doubled strategic location and billion to NT (gross value resources present added). The Government immense opportunity. has committed to billion further develop northern Unparalleled economic Australian billion growth tourism Darwin’s growth figures are to deliver staggering. Australian Bureau $2.2 billion Occupancy rate of Statistics (ABS) figures show in visitor for June it is Australia’s second fastest growing expenditure by capital city, with its population rising 3% in 2020.

2012-13. In the decade since 2003, the City Deloitte Access Economics’ Tourism & of Darwin’s Gross Regional Product has Hotel Market Outlook (Feb ’14) reported room almost doubled from just over $4.5 billion rates in Darwin were continuing to grow at to $8.24 billion*. the nation’s fastest pace. Rates grew by Massive oil and gas projects have 11% over the year to May 2013, and by 7.7% brought unparalleled economic growth, and over the year to December, with the city’s will continue to do so. The $US34 billion average room rate lifting to $168.

INPEX Ichthys LNG development, on top of

$4.5 to $8.24

the $1.5 billion ConocoPhillips LNG plant and Shell’s $15 billion floating LGN project north of the Kimberley coastline have been transformational – positioning Darwin as a major player in the international big league for oil and gas.

87%

Rates & RevPAR climb with demand

Tourism NT’s Monthly Accommodation Report showed Darwin’s occupancy rate for June 2014 was 87%, with an average room rate of $225 (up 3.4% on 2013) and average

RevPar of $197 (up 3.8% on 2013).

Both Deloitte and Tourism NT report the Darwin region achieves an extremely healthy year round average occupancy of 79%. In the peak season (September quarter) the rate is a staggering 90%. The resource sector continues to underpin demand, while also reducing the seasonality of the market.

But that has brought with it supply pressures.

A startling example of the impact the resources industry has on accommodation demand and supply was seen in August this year. ConocoPhilips booked all rooms (500) across three city properties for up to six weeks for its LNP plant ‘shutdown’ (major maintenance operation). It came in peak tourism season.

The Territory’s Tourism Vision 2020 strategy highlights the need for an extra 205 to 225 hotel rooms to be provided every year.

Hotel room shortage

For some time, hotel room shortage has been an issue of concern in Darwin and the nearby city of Palmerston. Little new stock had been developed for some time. Between March 2012 and June 2013, 211 rooms were added in Darwin. H Hotel opened in May 2013, and the new élan Soho Suites opened in July this year.

Palmerston remains under accommodation pressure. The 4.5-star Quest Serviced Apartments opened there in 2010, and approval has now been given for development of the $50 million Palmerston Hotel in the heart of the Palmerston CBD. This hotel will provide 161 rooms and include 32 suites and 41 short-stay apartments.

Despite 4% growth in short stay accommodation in Darwin in 2013, demand was such that occupancy rates remained steady. While Deloitte has forecast room supply growth to continue, rising demand is expected to easily soak up the additional capacity. They predict average room rates will maintain a robust pace of growth – at around 4% p.a. to end-2016, with RevPAR growth forecast at 3.9% p.a. over that time. *Source: National Institute of Economic and Industry Research (NIEIR)

resortbrokers.com.au

61

Relief Managers

62

Barry & Lesley Roberts

Tony Payne

Belinda & David Gustafson

Motel Manager Nationwide

Motel Manager South East VIC

All Property Managers NSW & QLD

+61 40428 422 456

+61 429 998 044

+61 403 219 562

les.baz@bigpond.com

tonypayne2@bigpond.com

gustafsondavid@hotmail.com

Gary & Robyn Loakes

Llew & Trisha Pointon

Christopher Hillman

All Property Managers Nationwide

Motel Manager Nationwide

Management Rights, Motels & Resort Managers Capital Cities, Australia Wide

+61 408 798 352

+61 400 035 359

+61 488 550 005

grl21@bigpond.com

llewp@tpg.com.au

christopher.hillman@bigpond.com

Garth & Trish Carey

Chris & Carmel Moloney

Maryanne & Geoff Cheeseman

Resort & Motel Manager QLD & NSW

Motel Managers Nationwide & New Zealand

All Property Types Nationwide

+61 421 359 059

+61 400 483 291

+61 410 662 963

garth@careynominees.com.au

ccmoloney-315@hotmail.com

cheezmg@bigpond.com

Grant & Kerry O'Sullivan

Nanette Mortimore

Peter & Janine Templeton

All Property Types QLD & NSW

Management Rights Manager Brisbane Area

Motels, Backpackers & Caravan Parks Managers Australia Wide

+61 404 473 100

+61 419 707 773

+61 408 178 130

grant2466@bigpond.com

nanette.mortimore@gmail.com

tempy7@bigpond.com

Peter & Pam Kotevski

Sharyn & Phillip Stallman

Paul & Jane Hansen

Motels, Caravan Parks & Resort Managers Australia Wide

Motel Managers Nationwide

Caravan Parks & Villa Managers QLD, NSW & VIC

+61 408 187 222

+61 428 931 589

+61 438 877 932

twopees26@yahoo.com.au

pjstal@bigpond.com

happycamperparkmanagement@gmail.com

resortbrokers.com.au

Industry Specialists 100 95

[

75

100

a

]

RESORT MANAGEMENT ADVISORS

25 95

SPECIALISTS IN:

Review of operations | Pre-opening planning

5 75 Owner representation | Operations management 0

25

For professional assistance contact: tjshort@attglobal.net or phone 0413 752 717

Expert management rights lawyers

TM

The team at Hynes Legal can assist you with all of your management rights needs.

We are different, not in what we do, but in how we do it - fixed fees, returned phone calls, accessible lawyers, no billing surprises and more. Try Hynes Legal.

Would you like to receive the best management rights information in the industry?

Visit www.hyneslegal.com.au/subscribe

Frank Higginson Director 07 - 3193 0588

Sharon Flood Senior Associate 07 - 3193 0502

5 0

Specialising in Hotels & Motels

Service Stations

Management Rights

Residential Development

Caravan Parks

Industrial

Child Care Centres

Commercial & Retail

Mike Phipps 0448 813 090 Paul Grant 0448 417 754 mike@mikephippsfinance.com.au paul@mikephippsfinance.com.au 4/31 Mary Street, Noosaville, Qld

BRISBANE P 07 3226 0000 F 07 3226 0099 E mailbris@lmw.com.au | www.landmarkwhite.com.au

THE MANAGEMENT RIGHTS LAWYERS Servicing resident unit managers throughout Queensland and New South Wales Brisbane 07 3007 3777 Level 15, 167 Eagle Street Brisbane Q 4000

Gold Coast 07 3007 3777 Corporate House, 155 Varsity Pde, Varsity Lake Q 4227

Buying or selling Hotels Caravan Parks, Motels, Management Rights?

Call (07) 3220 1144 or email@hillhouse.com.au

www.hillhouse.com.au

 Specialist Business Advisor to the Accommodation Industry  Specialist Business Advisor to the Accommodation Industry  Verifications Reports  Verifications Reports  Trust Account Audits  Trust Account Audits  Business Services  Business Services  Taxation Specialist Business Advisor to the  Taxation  SpecialistAccommodation Business Advisor to the Accommodation Industry Industry  Accounting  Accounting Verifications Reports Verifications Reports | Trust Account Audits | Business  Benchmarking Benchmarking Trust Account Audits

Services | Taxation Accounting | Benchmarking

Sunshine Coast Brisbane/Gold Coast  Business Services Sunshine Coast JohnCoast Siemon Brisbane/Gold Sam Hodgetts John Siemon Sam(07) Hodgetts  Taxation (07) 5474 8955 3421 3421 (07) 5474 8955 (07) 3421 3421  Accounting Email: cpa@mcadamsiemon.com.au Email: www.mcadamsiemon.com.au cpa@mcadamsiemon.com.au  Benchmarking www.mcadamsiemon.com.au ‘ALL PROFESSIONAL FEES QUOTED UP FRONT’ Sunshine Coast Brisbane/Gold Coast ‘ALL PROFESSIONAL FEES QUOTED UP FRONT’ John Siemon Sam Hodgetts (07) 5474 8955

(07) 3421 3421

Email: cpa@mcadamsiemon.com.au www.mcadamsiemon.com.au ‘ALL PROFESSIONAL FEES QUOTED UP FRONT’

Valuations and Property Advice Specialists in Accommodation Properties and Businesses Prepurchase advice, preparing for sale, rent assessment, and valuation panellist for a wide range of banks.

Owen Barbeler (07) 3620 7900

Owen Barbeler Associate Director

Brisbane T: 07 3620 7900 E: owen.barbeler@m3property.com.au

LOOKING TO REACH THE ACCOMMODATION AND TOURISM INDUSTRY? WHY NOT ADVERTISE HERE. YOU WILL SEE A RANGE OF INDUSTRY SPECIALISTS ARE ADVERTISING IN OUR WIDELY READ INFORMER. CIRCULATION - 8,500 - MAILED HARD COPIES AND 15,650 - SENT DIGITALLY IF YOU WOULD LIKE A COMPANY ADVERT ON THIS PAGE PLEASE CONTACT: CARLA COOK: 0467 600 611 OR EMAIL US CARLACOOK@RESORTBROKERS.COM.AU Qualifications

Owen has worked in the valuation industry since 2002 and specialises in going concern valuations.

Owen has experience across many types of accommodation properties including hotels, motels, resorts, student accommodation, management rights and affordable housing.

> Bachelor of Business Management (Real Estate and Development), University of Queensland > Associate of the Australian Property Institute (AAPI) > Certified Practising Valuer

resortbrokers.com.au

63

Exclusive Listings

64

PROPERTY DESCRIPTION

TYPE

LOCATION

UNITS

PERM/ HOL

NETT

PRICE

Relaxed Beach Lifestyle Business adjoining Golf Course

MR

Tweed Heads

80

Permanent

$113,347.00

$845,000.00

RightsWA-UniqueBeachHouses,ConferenceCentre/RestaurantandBar MR

Preston Beach

76

Holiday

$232,000.00

EOI

Serviced Apartment Business in Victorian / NSW border city

LH

Echuca

90

Temp

$360,000.00

$1,425,000.00

First Class off the plan opportunity!

MR

Nundah

54

Permanent

$138,570.00

$1,094,000.00

Freehold 3.5 Star Beach Motel & Backpackers - Tweed Coast NSW

FH

Tweed Coast

16

Temp

$213,762.00

$1,495,000.00

Unique Management Rights Offering in a Fantastic Location

MR

Newstead

117

Permanent

$393,250.00

$3,018,000.00

Beautiful New England Gem

LH

Tamworth

40

Temp

$386,823.00

$1,295,000.00

132 Unit Staged Off the Plan Management Rights

MR

Buderim

132

Permanent

$338,741.00

$1,974,336.00

Burleigh Beachside Gem with 21 years on Agreement!

MR

Burleigh Heads

30

Mixed

$128,000.00

$830,000.00

Melbourne fringe, long lease & fully renovated

LH

Drouin

15

Temp

$116,144.00

$410,000.00

Townsville leasehold motel for price of a house!

LH

Townsville City

24

Temp

$152,732.00

$450,000.00

Stunning Sunshine Coast Complex - Potential Plus

MR

Coolum Beach

47

Mixed

$327,373.00

$2,275,000.00

Very Profitable Freehold Business in Excellent Town

FH

Ararat

14

Temp

Boutique B&B in very busy QLD Country Town

LH

Chinchilla

12

Temp

$126,500.00

$420,000.00

30 Year Lease - Great Ocean Road

LH

Apollo Bay

12

Temp

$204,896.00

$775,000.00

Musgrave Roadhouse Cape York

FH

Cairns

15

Temp

$540 000

$3,300,000 + SAV

Leasehold - Brand New 35 Year Lease

LH

Georgetown

30

Temp

$250,000.00

$795,000 +SAV

Lifestyle Coastal Management Rights Opportunity

MR

Port Macquarie 26

Mixed

$122,985.00

$820,000

Priced right with bucket loads of upshot

FH

Chillagoe

7

Temp

$230,000.00

920,000 + SAV

Leasehold - Major Regional City

LH

Ballarat

25

Temp

$186,032.00

$670,000.00

Strong business with high return on investment

MR

Cairns

44

Holiday

$280,000.00

1,470,000

Perfect motel for the 'hands on' operator

LH

Ballarat

14

Temp

$252,258.00

$850,000.00

Leasehold motel in Chinchilla

LH

Chinchilla

26

Temp

$478,310.00

$1,395,000.00

Deluxe Mooloolaba holiday complex - This one ticks all the boxes

MR

Mooloolaba

46

Holiday

$347,208.00

$2,280,481.00

Small Brisbane Leasehold

LH

New Farm

14

Temp

$161,465.00

$675,000.00

Immaculate leasehold in thriving regional motel town

LH

_

$1,760,000.00

Dubbo

25

Temp

$303,605.00

$1,060,000.00

Exciting leasehold opportunity - Brand new property in the Hunter LH

Pokolbin

36

Temp

$570,000.00

$1,600,000.00

Brisbane Bayside management rights right on the beach

Redcliffe

74

Permanent

$1,975,000.00

$1,975,000.00

Perm.managementrightsinperfectlocationofferingpremiumlifestyle MR

MR

Burleigh Heads

27

Permanent

$73,620.00

$699,000.00

Exceptional opportunity in Western Australia's goldfields

FH

Coolgardie

41

Temp

$404,145.00

$1,995,000.00

Boutique holiday complex netting $142k

MR

SurfersParadise 36

Mixed

$142,000.00

$949,000.00

Attractive profitable motel with a beautiful residence

LH

Ararat

14

Temp

$150,364.00

$540,000.00

Receivers' sale - Management Rights and Unit for sale

MR

Rainbow Beach

35

Holiday

-

EOI

Affordable luxury property overlooking the Great Ocean Road

LH

Skenes Creek

18

Temp

$236,877.00

$895,000.00

By the boardwalk by the bay

MR

Margate

48

Permanent

$95,433.00

$875,000.00

Gladstone's finest - Earn a huge 60% return on this leasehold

LH

Gladstone

32

Temp

$360,000.00

$600,000.00 + SAV

Charming motel set in prime location

FH

Chinchilla

26

Temp

$773,310.00

$4,900,000.00

A piece of Brisbane's history in trendy Teneriffe

MR

Newstead

66

Permanent

$135,312.00

$1,302,435.00

Nicely renovated property in Rockhamption

LH

Rockhampton

22

Temp

$165,620.00

$550,000.00

Easy to run complex earning you a good income at the same time

MR

Spring Hill

56

Permanent

$152,113.00

$1,360,000.00

Sea change business & lifestyle - Tweed Coast

MR

Pottsville

40

Permanent

$75,333.00

Southside rent roll

MR

Woodridge

33

Permanent

$715,000.00 EOI

NSW country caravan park with duel income streams

FH

Tenterfield

60

Temp

$210,000.00

$1,380,000.00

A top spot

MR

Lawnton

54

Permanent

$82,661.00

$680,000.00

Low maintenance profitable business

MR

Cairns

54

Permanent

$97,000.00

$685,000.00

Townsville's premier motel is now available to purchase as a lease

LH

Wulguru

31

Temp

$210,000.00

$700,000.00

Flourishing serviced apartments leasehold in major NSW rural city

LH

Dubbo

65

Temp

$477,892.00

$1,900,000.00

Substantial leasehold accommodation business in NSW City

LH

Maitland

42

Temp

$307,733.00

$1,400,000.00

First timer's delight

LH

Creswick

10

Temp

$98,059.00

$330,000.00

resortbrokers.com.au

PROPERTY DESCRIPTION

TYPE

LOCATION

UNITS

PERM/ HOL

NETT

PRICE

Sydney accommodation leasehold at below market value

LH

Mascot

91

Temp

$538,767.00

$1,250,000.00

Opportunity is knocking....Don't delay

MR

Aspley

69

Permanent

$80,396.00

$750,000.00

Modern + waterfront + permanent management rights!

MR

Biggera Waters

57

Permanent

$172,256.00

$1,435,000.00

Rare VIC management rights

MR

Metung

13

Mixed

$112,286.00

$910,000.00

Potential cash cow - Coolum Beach

MR

Coolum Beach

47

Mixed

$327,373.00

$2,275,000.00

Mid North Coast leasehold - Certainly ticks the boxes

LH

Taree

28

Temp

$221,824.00

$695,000.00

Ocean views from your private courtyard

MR

AlexandraHeads

17

Holiday

$107,966.00

$1,019,474.00

Stunning Quest Complex

LH

Shepparton

69

Temp

$485,376.00

$2,225,000.00

Great Ocean Road Gem

LH

Warrnambool

32

Temp

$572,285.00

$2,150,000.00

No requirement to live on site are as scarce as hen's teeth!

MR

Stafford

54

Permanent

$105,000.00

$645,000.00

The Gold Coast's premier address

MR

Hollywell

196

Mixed

$460,000.00

$3,500,000.00

Beachfront Icon Noosa

MR

Noosa Heads

66

Holiday

$561,000.00

$3,723,300.00

The one! High netting, modern, permanent management rights

MR

Gold Coast

185

Permanent

$430,000.00

$3,245,000.00

Coolangatta Rainforest Retreat and Pet Motel with huge potential

FH

Carool

10

Temp

$211,324.00

$4,200,000.00

Gold Coast's time to shine - Continued from page 51

G:link, the 16-stop light rail between Griffith University and Broadbeach is up and running, and the new Gold Coast Aquatic Centre on the waterfront at Southport has just hosted the 2014 Pan Pacific Swimming Championships (PanPacs).

Resort Brokers, along with many industry commentators, has often stressed how vital it is for tourist destinations to refresh their offering with new facilities, attractions and infrastructure. The Gold Coast is doing just that, and investment is flowing as a result.

Singaporean hotel giant Banyan Tree Group has bought a prime beachfront site in Surfers

Paradise where it plans to build a new fivestar property. Reports suggest more than 10 apartment projects are likely to be delivered along the coastal strip by 2018.

The $1 billion Jewel, to feature three crystal towers on the Surfers Paradise beachfront, now seems certain to proceed after developer, China’s Ridong Group, last month secured financial backing from Chinese billionaire Wang Jianlin.

Southport, where the city’s new Chinatown is being established, is also reaching for the sky. Among a raft of developments planned and underway are proposals for a 1.5ha multi-use precinct to include high rise towers, shopping and dining, education and resort facilities, and a billion-dollar project called

BEST WESTERN Drouin Motor Inn Drouin, VIC

BEST WESTERN PLUS Launceston Launceston, TAS

Imperial City.

Though many say developer Azzura International Constructions’ plans for Imperial City are overly ambitious (up to six towers including a 100-plus-storey super-tower), they are indicative of the tremendous upswing we’ve seen in positive sentiment. The fact is, a great deal of confirmed investment capital is flowing to support the sentiment.

Such is the confidence in the Gold Coast’s revival as a red hot hotel and investment market that Sheraton Mirage owner, Pearls Australasia, has placed the five-star beachfront resort on the market. Indian-backed Pearls bought the hotel in 2009 for $62.5 million and has since completed a $26 million refurbishment.

BEST WESTERN PREMIER Terrace Hotel Perth, WA

Three hotel types. One brand. Experience the difference. info@bestwesternaustralia.com.au AUSTRALIA | NEW ZEALAND | FIJI

resortbrokers.com.au

65

Meet Our Team

66

Ian Crooks

Trudy Crooks

Tim Crooks

Managing Director Nationwide

Sales Manager Nationwide

Off The Plan Specialist Nationwide

+61 411 171 648

+61 477 882 210

+61 422 208 450

iancrooks@resortbrokers.com.au

trudycrooks@resortbrokers.com.au

timcrooks@resortbrokers.com.au

Nat Marler

Neville Littleton

Alex Cook

Broker South Brisbane & CBD

Broker North Brisbane

Broker North Gold Coast, Surfers Paradise & Main Beach

+61 424 077 288

+61 407 727 194

+61 467 600 610

nathanaelmarler@resortbrokers.com.au

nevillelittleton@resortbrokers.com.au

alexcook@resortbrokers.com.au

Glenn Millar

Tyler Millar

Lindsay Cooper

Broker Sunshine Coast

Broker Sunshine Coast

Broker West Qld & North NSW

+61 412 277 804

+61 411 271 761

+61 418 711 047

glennmillar@resortbrokers.com.au

tylermillar@resortbrokers.com.au

lindsaycooper@resortbrokers.com.au

Shane Wynhoven

Russell Rogers

James Carrick

Broker Greater Sydney, Central Tablelands & Hunter NSW

Broker South Coast, NSW

Broker Mid North & North West

+61 424 174 592

+61 416 166 909

+61 400 664 065

shanewynhoven@resortbrokers.com.au

russellrogers@resortbrokers.com.au

jamescarrick@resortbrokers.com.au

Gerard Hurry

Liz Galea

Carla Cook

Broker North West Victoria

Broker North East Victoria

Marketing Manager Nationwide

+61 417 250 211

+61 417 334 298

+61 467 600 611

gerardhurry@resortbrokers.com.au

lizgalea@resortbrokers.com.au

carlacook@resortbrokers.com.au

resortbrokers.com.au

David Jiang

Steve Campbell

David Janett

Broker and Chinese Liaison Nationwide

Broker Brisbane CBD & Surrounds

Broker South & West Brisbane

+61 481 500 278

+61 407 220 668

+61 404 204 672

davidjianghui@resortbrokers.com.au

stevecampbell@resortbrokers.com.au

davidjanett@resortbrokers.com.au

Ian Dore

Carolyn Griffith

Lyn Brodbeck

Broker North NSW & Gold Coast

Broker Central Gold Coast, Surfers Paradise & Main Beach

Broker South Gold Coast

+61 412 752 238

+61 419 675 429

+61 400 297 202

iandore@resortbrokers.com.au

carolyngriffith@resortbrokers.com.au

lynbrodbeck@resortbrokers.com.au

Len Booth

Shane Mullins

Des Fagg

Broker Central Queensland

Broker Far North Queensland

Broker Townsville & Surrounds

+61 438 139 422

+61 447 185 001

+61 427 849 119

lenbooth@resortbrokers.com.au

shanemullins@resortbrokers.com.au

desfagg@resortbrokers.com.au

Andrew Rendall

Jim Chapman

Stuart Charles

Broker Central West

Broker Quest Specialist - VIC, TAS, NSW & SA

Broker West Victoria

+61 412 635 344

+61 413 444 782

+61 458 588 472

andrewrendall@resortbrokers.com.au

jimchapman@resortbrokers.com.au

stuartcharles@resortbrokers.com.au

QLD Office

NSW Office

VIC Office

(07) 3878 3999

(02) 9904 8224

(03) 9347 3100

PO Box 5004 West End, QLD 4101

PO Box 78 Freshwater, NSW 2096

PO Box 1100 Carlton, VIC 3053 resortbrokers.com.au

67

QUEENSLAND OFFICE PO Box 5004 West End, QLD 4101 (07) 3878 3999 NEW SOUTH WALES OFFICE PO Box 78 Freshwater, NSW 2096 (02) 9904 8224 VICTORIA OFFICE PO Box 1100 Carlton, VIC 3053 (03) 9347 3100 facebook.com/resortbrokersaustralia resortbrokers.com.au

The Original and still No. 1