Brookfield Acquiring Brisbane Hotel for $58M as APAC Hospitality Sector Shines

Brookfield Asset Management is expanding its bets on hospitality in Asia Pacific with the Canadian giant announcing on Thursday that it has agreed to acquire a hotel in Brisbane, Australia.

The Toronto-based firm is buying the Hotel X Brisbane Fortitude Valley, Vignette Collection from local developer Pointcorp Development Group for around A$90 million ($58 million), according to a report in The Australian, with Brookfield pointing to hotels as an increasingly attractive asset class in Australia and across the region.

“Hospitality is a growing focus for us in Australia and across the Asia Pacific, driven by growing international and domestic tourism numbers and reduced supply given increased borrowing and construction costs,” Brookfield co-head of Australia real estate Ruban Kaneshamoorthy said in a statement. “We are actively looking at other hospitality opportunities around Australia as we seek to grow our hospitality platform.”

During this year Brookfield has signaled plans to up its hospitality investments in Europe and is reportedly gearing up for a $599 million Indian hotel IPO.

Olympic City

Pointcorp completed the 146-key luxury hotel in Brisbane’s Fortitude Valley in 2021, with Brookfield paying in the neighbourhood of over A$616,000 per key for its prize.

Managed by Intercontinental Hotel Group, the property is located in a popular dining and retail hub just northwest of central Brisbane, which currently ranks as Australia’s fastest growing state capital.

With the city set to host the summer Olympics eight years from now, Brookfield expressed confidence in the potential of Brisbane’s hospitality market.

“With the highest tourism expenditure nationally and its population forecast to grow 40 percent during the next 25 years, there is a long runway for growth for Brisbane’s hotel market, which is expected to drive significant revenue growth in the medium term,” Kanesworthy said.

In its statement, Brookfield pointed to favourable market dynamics as driving its investment decision. “The city is benefitting from strong sector tailwinds ahead of the 2032 Olympic Games, including a lack of new hotel supply, strong economic and population growth, a buoyant tourism industry and robust consumer spending,” the company said.

Local investor and asset manager Ark Capital Partners assisted Brookfield in the transaction. CBRE Hotels’ Wayne Bunz and Hayley Manvell handled the sale of the hotel via an off-market process.

“The sale of Hotel X represents a landmark transaction in the Brisbane hotel market, building upon on a string of high-profile hotel sales and reinforcing Brisbane City’s position as a hotspot for hotel investment,” CBRE’s Bunz said.

The transaction is expected to close by the end of this year.

Hotel Expansion

With approximately $20 billion in hospitality assets under management representing over 40,900 keys across North America, Europe and Asia, Brookfield is one of the largest hotel investors globally.

In 2021 the company acquired Spain’s Selenta Hospitality Group, adding over 2,200 keys to its portfolio in a 440 million euro (then $521 million) deal. During this year Brookfield has reportedly indicated interest in expanding its European hotel holdings to include properties in Greece and Croatia.

In September of this year Brookfield-backed Schloss Bangalore, which owns Indian luxury hotel chain The Leela, filed for an INR 50 billion ($599 million) initial public offering.

In January, Brookfield sold a majority stake in the Ritz-Carlton Key Biscayne hotel in Florida to local hotel investment firm Gencom in a deal which valued the property at over $400 million, after last year selling the Diplomat Beach Resort in Hollywood, Florida for $835 million, according to industry media reports.