MARKETVIEW Australia Hotels, Q4 2019 Brisbane and Perth showing positive signs 73.9% $186 $137 8.7 million 5.0% *Arrows indicate change from previous year. Key Points BRISBANE AND PERTH ABSORBING SUPPLY ▪ Annual RevPAR declined 1.9% to $137 for the year ending December 2019 ▪ National occupancy declined 0.9% to 73.9% ▪ ADR declined 1.0% to $186 for the year ending December 2019 ▪ Hobart, Brisbane and Adelaide all registered positive annual RevPAR growth for the year ending December 2019 ▪ International visitor arrivals reached a record high of 8.7m for the year ending September 2019, an increase of 2.5% on 2018 ▪ Spending by domestic visitors in the year to September 2019 was $79.1bn, up 13.3% on 2018, whilst overnight spend by international visitors was $31.3bn, up 5.0% on 2018 ▪ Hot el sales volume for 2019 was ~$1.8bn Chart 1: Room Supply vs. Room Demand Growth – Brisbane & Perth 15% 20% 15% 10% 10% 5% 5% Movingannual change (%) Movingannual change (%) 0% 0% Dec-17 Dec-18 Dec-19 Dec-17 Dec-18 Dec-19 Brisbane room nights available (supply) Perth room nights available (supply) Brisbane room nights occupied (demand) Perth room nights occupied (demand) Source: STR; CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 1 MARKETVIEW AUSTRALIA HOTELS National Overview *Rolling annual December-19 Adelaide Brisbane Occupancy 80.4% 1.9% Occupancy 72.0% 1.4% ADR $156 -0.1% ADR $157 1.4% RevPAR $125 1.8% RevPAR $113 2.8% Cairns Canberra Occupancy 77.4% -3.8% Occupancy 76.4% -2.9% ADR $148 -2.8% ADR $171 -2.8% RevPAR $115 -6.5% RevPAR $130 -5.6% Darwin Gold Coast Occupancy 55.9% -14.7% Occupancy 69.5% -3.3% ADR $146 -0.2% ADR $197 -2.6% RevPAR $82 -14.9% RevPAR $137 -5.8% Hobart Melbourne Occupancy 83.1% 4.7% Occupancy 80.3% -2.0% ADR $184 3.0% ADR $186 0.1% RevPAR $153 7.9% RevPAR $149 -1.9% Perth Sydney Occupancy 73.2% 0.1% Occupancy 82.5% -1.9% ADR $164 -1.0% ADR $220 -3.0% RevPAR $120 -0.8% RevPAR $182 -4.8% Source: STR, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 2 MARKETVIEW AUSTRALIA HOTELS DOMESTIC PURCHASERS ACTIVE Chart 3:Hotel Sales above $5 million $4,000 70 $3,500 60 $3,000 50 $2,500 40 $2,000 30 Millions$ $1,500 $1,000 20 $500 10 $0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Domestic Offshore Number of Transactions (RHS) Source: RCA, CBRE Research Table 1: Notable Transactions Q4 2019 STRONG SUPPLY PIPELINE HOTEL LOCATION SALE DATE PRICE (m) KEYS Vibe Sydney Sydney Dec-19 $108 150 Sebel Canberra Canberra Dec-19 $48 144 Source: RCA, CBRE Research Chart 2: National Supply Pipeline – opening before December 2024 12,000 45% 10,000 8,000 25% 6,000 4,000 32% 40% 22% NumberofKeys 2,000 8% 6% 56% 4% 4% - -2,000 Adelaide Brisbane City Cairns Canberra Darwin Gold Coast Hobart Melbourne City Perth City Sydney City Proposed DA Applied DA Approved Under Construction Recently Opened Withdrawn Source: Cordell, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 3 MARKETVIEW AUSTRALIA HOTELS Adelaide 80.4% $156 $125 STRONG FINISH TO THE YEAR Chart 5: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 6,000 4,000 2,000 Visitor Visitor nights(000s) 0 Sep-2012 Sep-2013 Sep-2014 Sep-2015 Sep-2016 Sep-2017 Sep-2018 Sep-2019 International Domestic Total Source: TRA, CBRE Research Q4 2019 INCREASE IN HOTEL NIGHTS Table 2: 2020 Supply Pipeline • Property Development Quality Number of Current Opening Type Keys Status Date 4 Under April Crowne Plaza New Build 326 Star Construction 2020 • 5 Under April M Suites Adelaide New Build 91 Star Construction 2020 Adelaide Casino - 6 Under September New Build 123 SKYCITY Star Construction 2020 • Hotel Indigo 4 Under December New Build 137 Adelaide Star Construction 2020 Source: CBRE Research Q4 2019 • SUPPLY TO HIT THE MARKET IN 2020 • • Chart 4: Hotel Performance KPIs Rolling Annual Change 4% 2% 0% % Change % -2% -4% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 4 MARKETVIEW AUSTRALIA HOTELS Brisbane 72.0% $157 $113 MARKET SHOWING RECOVERY Chart 7: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 10,000 5,000 Visitor Visitor nights(000s) 0 Sep-2016 Sep-2017 Sep-2018 Sep-2019 Sep-2012 Sep-2013 Sep-2014 Sep-2015 International Domestic Total Source: TRA, CBRE Research Q4 2019 INCREASE IN HOTEL NIGHTS • Table 3: Supply Pipeline Property Development Quality Number of Current Opening Type Keys Status Date 5 Under July Hotel Indigo New Build 146 • Star Construction 2020 Queens Wharf (Ritz Carlton, Dorsett, 5/6 Under January New Build 900 Rosewood, The • Star Construction 2023 Star) Source: CBRE Research Q4 2019 • LIMITED SUPPLY PIPELINE • • Chart 6: Hotel Performance KPIs Rolling Annual Change 3% 1% -1% % Change % -3% -5% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 5 MARKETVIEW AUSTRALIA HOTELS Cairns 77.4% $148 $115 PERFORMANCE SOFTENING Chart 9: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 4,000 3,000 2,000 Visitor Visitor nights(000s) 1,000 0 Sep-2013 Sep-2016 Sep-2017 Sep-2019 Sep-2012 Sep-2014 Sep-2015 Sep-2018 International Domestic Total Source: TRA, CBRE Research Q4 2019 DECREASE IN HOTEL NIGHTS • Table 4: 2020 Supply Pipeline Property Development Quality Number of Current Opening Type Keys Status Date • 5 Recently November Bailey New Build 217 Star Opened 2019 5 Under April Flynn New Build 311 Star Construction 2020 • Source: CBRE Research Q4 2019 • LUXURY HOTELS HAVE OPENED • • Chart 8: Hotel Performance KPIs Rolling Annual Change 6% 3% 0% % Change % -3% -6% -9% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 6 MARKETVIEW AUSTRALIA HOTELS Canberra 76.4% $171 $130 PERFORMANCE DECLINING Chart 11: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 4,000 3,000 2,000 Visitor Visitor nights(000s) 1,000 0 Sep-2014 Sep-2017 Sep-2012 Sep-2013 Sep-2015 Sep-2016 Sep-2018 Sep-2019 International Domestic Total BUSINESS TRAVEL REMAINS KEY MARKET Source: TRA, CBRE Research Q4 2019 • Table 5: 2020 Supply Pipeline Property Development Type Quality Number Current Opening of Keys Status Date • Mercure 4 Recently February New Build 90 Belconnen Star Opened 2020 Adina Grand 5 Under November New Build 132 Canberra Star Construction 2020 • Source: CBRE Research Q4 2019 NEW STOCK ENTERING THE MARKET • • • Chart 10: Hotel Performance KPIs Rolling Annual Change 6% 4% 2% 0% % Change % -2% -4% -6% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 7 MARKETVIEW AUSTRALIA HOTELS Darwin 55.9% $146 $82 OCCUPANCY STILL LOW Chart 13: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 3,000 2,000 1,000 Visitor Visitor nights(000s) 0 DECLINE IN NIGHTS SPENT IN HOTELS Sep-2013 Sep-2016 Sep-2017 Sep-2019 Sep-2012 Sep-2014 Sep-2015 Sep-2018 • International Domestic Total Source: TRA, CBRE Research Q4 2019 • Table 6: SupplyPipeline Property Development Type Quality Number of Current Opening Keys Status Date 5 Under June • Westin Darwin New Build 240 Star Construction 2022 Source: CBRE Research Q4 2019 • LIMITED HOTEL DEVELOPMENT • • Chart 12: Hotel Performance KPIs Rolling Annual Change 5% 0% -5% -10% % Change % -15% -20% -25% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 8 MARKETVIEW AUSTRALIA HOTELS Gold Coast 69.5% $197 $137 REVPAR DECLINING Chart 15: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 10,000 5,000 Visitor Visitor nights(000s) 0 Sep-2013 Sep-2016 Sep-2017 Sep-2019 Sep-2012 Sep-2014 Sep-2015 Sep-2018 International Domestic Total Source: TRA, CBRE Research Q4 2019 DECREASE IN HOTEL NIGHTS Table 7: Supply Pipeline • Property Development Type Quality Number Current Opening of Keys Status Date Signature 5 Under March New Build 254 • Broadbeach Star Construction 2021 Meriton Suites 5 Under September New Build 332 Surfers Paradise Star Construction 2021 Dorsett Hotel 4.5 Under January New Build 316 (The Star) Star Construction 2022 • Source: CBRE Research Q4 2019 LARGE SUPPLY PIPELINE • • • Chart 14: Hotel Performance KPIs Rolling Annual Change 12% 8% 4% % Change % 0% -4% -8% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 9 MARKETVIEW AUSTRALIA HOTELS Hobart 83.1% $184 $153 TOP PERFORMER Chart 17: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 3,000 2,000 1,000 Visitor Visitor nights(000s) 0 Sep-2013 Sep-2015 Sep-2016 Sep-2019 Sep-2012 Sep-2014 Sep-2017 Sep-2018 International Domestic Total Source: TRA, CBRE Research Q4 2019 STRONG HOLIDAY MARKET Table 8: 2020 Supply Pipeline • Property Development Quality Number Current Opening Type of Keys Status Date Crowne Plaza 4 Under April New Build 235 • Hobart Star Construction 2020 Hyatt Centric 5 Under June New Build 221 Hotel Star Construction 2020 5 Under September The Tasman New Build 152 Star Construction 2020 • Vibe Hotel 4 Under December New Build 120 Hobart Star Construction 2020 Source: CBRE Research Q4 2019 • STRONG PIPELINE IN 2020 • • Chart 16: Hotel Performance KPIs Rolling Annual Change 9% 6% 3% % Change % 0% -3% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019 Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc.