It’s been a busy first half of the year for our company, with no respite in sight, we continue to roll out successful apartment hotel accommodation models across NSW under both our Punthill and Veriu brands.
June saw the launch of our second NSW Punthill property – 52-apartment Punthill Parramatta, joining Punthill Norwest, which opened its doors in Sydney’s thriving Hills area mid-way through last year, and our latest property marks another important springboard for our brand’s ambitious growth strategy in the NSW market, with a number of further openings scheduled for the coming 2 years.
On the immediate horizon, our partnership with HOLDMARK Property Group is midway through the construction of Veriu Macquarie Park. With 184 studio and one-bedroom apartments, this will be our largest hotel to date – and one of the biggest in the area. A major business and technology precinct in Sydney, the suburb is home to numerous multinational corporations, research institutions, as well as Macquarie Hospital and Macquarie University, and attracts a high volume of business travellers and professionals attending conferences, meetings, and training programs. Our new hotel is expected to cater to this demand and provide convenient accommodation options for corporate visitors. Additionally, its proximity to popular tourist destinations including the Macquarie Shopping Centre, nearby natural parks, Sydney’s CBD and the northern beaches will make it an attractive base for leisure travellers who want to explore the region.
It’s one of two projects we are developing in partnership with HOLDMARK, the second being our new Punthill Ryde property which will soon commence construction. Like Veriu Macquarie Park, Ryde is strategically located close to a number of major business districts and is expected to cater to a similar clientele. HOLDMARK Property Group is recognised as a prominent developer in Australia, especially renowned for its expertise in commercial, residential, retail, and mixed-use developments. Their extensive knowledge and understanding of the local market where both hotels are being developed is a significant factor in our decision to partner with them, added to which, They have a proven track record of successfully executing high-end residential developments.
Other NSW properties currently under construction, or about to commence, includes our first regional property, Punthill Maitland opening in April next year; Punthill Liverpool due for completion in 2025; and the ACT’s Punthill Tuggeranong, Our first office conversion, also slated for a 2024 opening.
We are also about to embark on a significant period of expansion elsewhere around Australia over the next 12 months. Construction is now well underway on our brand’s latest Victorian property, Punthill Sunshine, in Melbourne’s inner west as well as various sites in South Australia.
Though the last few years have been challenging ones for our property sector, We have continued to thrive amid current economic headwinds, interest rate rises and upward pressures on construction pricing, which come as no surprise to our CEO Zed Sanjana.
He adds,
“I think our success is predicated on two things. First up, there’s our unique long-term lease model which has continued to prove a really attractive option for developers who are looking for certainty of income and ability to finance large scale developments more easily in the current market.””Secondly, we’ve always maintained a very disciplined focus on developing properties specifically situated to take advantage of substantial key catchment areas, which have been or are relatively underserviced in terms of quality corporate accommodation. If you look at our portfolio across both brands, every hotel is ideally positioned to be able to provide both corporate and leisure guests with premium accommodation in prime locations.”
Zed is also buoyed by a significant pent-up demand for travel which has resulted in remarkable growth in Average Daily Rates (ADR) by the end of December 2022, surpassing pre-pandemic rates in all major markets.
“Nationally, market ADR has increased by 24% over the year, reaching $228, which is 23% higher than the rates observed in 2019. That points to a strong recovery in the hospitality industry, with both ADR and occupancy trending positively and approaching, or even surpassing, the levels seen before the pandemic. We’re well positioned to meet this demand, and increased top line performance is also significantly assisting our ability to provide developers with more compelling cashflows to support new hotel developments.”
Having now successfully established a comprehensive hotel offering throughout Australia’s eastern seaboard, Zed makes no secret of our ambition to become a national operator.
“Since 2020, the Veriu Group has grown its portfolio of hotels from 14 to 21, representing network growth of 50%. This number is set to rise to 25 with the openings of Veriu Macquarie Park, Punthill Maitland and Punthill Tuggeranong in 2024. We’re planning to commence construction on somewhere between 4 – 6 new properties around Australia next year, which along with Liverpool, Geelong and Sunshine, will ultimately boost our overall portfolio to in excess of 3000 rooms and apartments operating or in development across well over 30 sites under the combined Veriu Hotels & Suites and Punthill Apartment Hotels brands.”
The Australian accommodation market has been consistently undersupplied for a number of years, particularly in terms of upscale and design-driven apartment hotels in key corporate locations, and we remain focused on bringing more unique and interesting accommodation options to CBD, suburban and regional markets, in new locations underpinned by the business travel segment, supported by business and industrial parks, universities, hospitals and major infrastructure projects.
We’re currently targeting around 80 hotels by the early 2030s, partnering with top-tier developers and local businesses along the way and we have every confidence we are going to get there.
