July 2013 informer by iformat

INFORMER What lies ahead? In this edition, our panel of ‘crystal ball gazers’ predict what 2013/2014 holds

resortbrokers.com.au

No. 72 | July 2013

Australia’s No.1 tourism & business

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In my 35 years of selling motels I have never come across such an outstanding idea, this will revolutionise motel construction” Ian Crooks RESORT BROKERS AUSTRALIA

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Past, present & future

Ian Crooks

MANAGING DIRECTOR

Where will the 2013-14 financial year take us? Is it time to make that next investment? Can we take the business to the next level? A crystal ball would come in handy. But, rather than consult the mystics, we’ve asked some industry masters what they see in our future. Their readings make good reading. 3

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he theme of this Informer is all about what lies ahead. It came about when we first sat down to brainstorm ideas for the issue. The Federal Budget had just been delivered, full of economic caution and fairly uninspiring. The political argy-bargy of the world’s longest election campaign was already wearing thin. It seemed everyone we spoke to was just waiting for it all to be over, so they could get on with life. So, we decided to ask all our contributors, and a few more very switched-on industry contacts, to gaze into their crystal balls and tell us what we might expect over the coming year. Then, as if we needed reminding of just how unpredictable things can be, along comes a new (recycled) prime minister, even without an election. To be fair to all our crystal ball-gazers, most of their views were expressed prior to Kevin Rudd’s return. But, they remain relevant, regardless of the political situation. Enjoy their insights. There actually is plenty to look forward to. While everyone was busy looking forward, I also had a wonderful opportunity to step back in time. And I can’t tell you what a pleasure it’s been. With a few of our key personnel on leave, I stepped in to help look after their clients. I relished the chance to get back to the coalface, calling on motel and management rights operators.

When I started Resort Brokers all those years ago, I spent the first 11 years driving 2000 kilometres per week, every week, knocking on doors and getting to know people in the accommodation industry. I really enjoyed getting back to spending time with the terrific people in the tourism and hospitality business. And I was amazed how many of you I already knew, because our paths had already crossed during my 28 years in the industry. One couple said they attended a seminar in 1994 where I spoke about buying motels as a commercial investment. Afterwards, through Resort Brokers Australia, they had bought a property on the NSW-Queensland border. Well, they still own it, and they are now about to embark on a second investment. I was surprised and delighted that they seemed to remember everything I said back at that seminar, and it had served them well. They were very gracious in saying so. I found the average age of operators has changed from a quarter of a century ago. They’re younger now, which is great for the industry. But they are still fantastic, hardworking, decent people full of enthusiasm. Most seem to have a real zest for the job, which is why we should look ahead with optimism. And the figures actually do tell a story of healthy activity. At Resort Brokers, we had a really strong 2012-13, achieving the highest annual sales tally in five years. We wrapped up the year with more than 120 sales concluded. And 2013-14 looks even stronger. As I write, we already have over 55 contracts in the pipeline. So enjoy this first issue of the new financial year, stay confident, and reignite your passion for our industry. You’ll find plenty to inspire, including great profiles of Staywell Hospitality Group, a proud Aussie company making its mark overseas, and highly respected Quest Apartments CEO Paul Constantinou. Finally, you will notice that this edition of the Informer is out a little bit later than usual. This is due to our editor having a baby a few weeks ago. We wish her the very best in the coming months. carlacook@resortbrokers.com.au or PO Box 5004, West End QLD 4101

INSIDE MIKE O’CONNOR’S COLUMN

FEATURE: PREDICTIONS 2013/14

HOTEL GROUP

MANY FACES OF ACCOM. INDUSTRY 40 AGENT PROFILES

RELIEF MANAGERS

INDUSTRY SPECIALIST

EXCLUSIVE LISTINGS

OUR TEAM

DIRECTORY

RESORTBROKERS.COM.AU 3

EXCLUSIVE

his incredible piece of paradise is located to the southern end of the Hinchinbrook Channel on the mainland. The leasehold offering of the Hinchinbrook Marine Cove Motel comprises of 20 self-contained motel rooms and 11 self-contained cabins. The property also features a front office reception area, commercial laundry, large chandlery shed, 3 bedroom manager’s apartment, conference centre, BBQ facilities, in-ground infinity swimming pool and private boat ramp with fishing pontoons. This is the first time this property has been offered to the market in this format and provides an exciting opportunity to capitalise on a location like no other. The reception overlooks the busy 4 lane council boat ramp and parkland. The scenery around the heritage listed Hinchinbrook Island is spectacular. Dive boats leave daily for amazing reefs in close proximity. Australia’s best fishing is on your doorstep. Chase Barramundi in the estuaries or head outside to the reef, your choice. The conference centre caters for a variety of corporate functions and the occasional wedding if desired.

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Australia’s fishing mecca ABSOLUTE WATERFRONT LEASEHOLD OFFERING

The spacious air-conditioned residence has 3 bedrooms, 2 bathrooms, kitchen and living room and is located above the reception with magnificent views. The motel currently operates profitably but there is a real opportunity to increase the occupancy to the higher rates being achieved by self-contained apartments in the region – ENQUIRE NOW! • New 25 year lease • Opportunity to capitalise on out sourcing the laundry for other businesses within the direct area • Private boat ramp and moorings • A fisherman’s dream • Snorkelling at Pelorus and Orpheus Islands only 20 minutes away

Shane Mullins EXCLUSIVE AGENT Mobile: 0447 185 001 Brisbane office: (07) 3878 399 Email: shanemullins@resortbrokers.com.au

Len Booth EXCLUSIVE AGENT Mobile: 0438 139 422 Brisbane office: (07) 3878 3999 Email: lenbooth@resortbrokers.com.au

Adjusted Nett Profit: $203,000 Turnover: $537,000 PRICE: $690,000

REF: LH002589

EXCLUSIVE

The best opportunity in Tropical North Queensland

The property has a commercial liquor licence with a bar and restaurant all under the one roof. The takeaway shop is a one stop shop – offering fuel, merchandise, fishing tackle and hot and cold food options.

25 YEAR LEASE

On the grounds there are 12 fully selfcontained townhouses and 1 x three bedroom apartment, all with covered parking.

Shane Mullins EXCLUSIVE AGENT Mobile: 0447 185 001 Brisbane office: (07) 3878 399 Email: shanemullins@resortbrokers.com.au

Len Booth EXCLUSIVE AGENT Mobile: 0438 139 422 Brisbane office: (07) 3878 3999 Email: lenbooth@resortbrokers.com.au

Adjusted Nett Profit $200,230 Turnover: $1,210,000 PRICE: $665,000

REF: LH002588

he Channel Inn and Townhouses form part of the Hinchinbrook Marine Cove Resort. They are located to the southern end of the Hinchinbrook Channel on the mainland, close to the coastal town of Lucinda. The resort is perfectly situated amidst the wonders and splendour of Tropical North Queensland, 138 km north of Townsville. The location makes it an ideal gateway for exploring Hinchinbrook Island, the Channel, Pelorus and Orpheus Islands. You can also take advantage of the renowned fishing and diving activity in the area. The Channel Inn provides a full service to the surrounding area, for locals, domestic/ international tourists and corporate workers (sugar industry, road tech, Ergon, etc).

The gardens are manicured with a large inground swimming pool and BBQ gazebo to complete the deal. The manager’s residence is located above the main building providing exquisite views of area. This presents as a great opportunity to increase the exposure of the commercial liquor licence, provide great accommodation in a fantastic area and catch Barramundi at your doorstep. • New 25 year lease • Magnificent water views • In-ground swimming pool • Commercial liquor licence INSPECT TODAY – THIS IS IT!

EXCLUSIVE

esort Brokers Australia is delighted to offer the leasehold interest of a beautiful, self rated 4½ star, 50 unit, corporate style motor inn. This property is spectacular, if not one of the best we have ever seen! The property is located in Dysart, a town in central Queensland. Established in 1973, Dysart serves as a service centre for the nearby Norwich Park, Saraji and other coal mines, as well as grazing properties in the district. This are is rapidly expanding, with gas development expected to be bigger than the Chinchilla / Roma basin reserves. It is approximately 3½ hours drive north west of Rockhampton and is just 75km from Middlemount, another centre in Central Queensland for the mining industry. The fabulous two level manager’s unit consists of four bedrooms. The second level has been converted to a unit for the assistant manager, including an ensuite. There are two additional bedrooms for chefs or family, each with their own separate bathroom. The ground floor has its own laundry which opens onto a private grassed area. There is a very spacious and modern

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One of the finest leaseholds you will ever see CORPORATE TRADE - 75% OCCUPANCY kitchen with a large L-shaped dining/living room that also opens onto a private patio suitable for your own barbecue. This property is perfect for syndicates or partnerships.

Len Booth EXCLUSIVE AGENT Mobile: 0438 139 422 Brisbane office: (07) 3878 3999 Email: lenbooth@resortbrokers.com.au

A truly magnificent motel with a 150 metre frontage to the road, an impressive looking 2 level building. The first to inspect, we are sure, will buy! • 75% occupancy • 19 years on lease • 150 meter frontage • 50 seat licenced restaurant • Conference room with every modern convenience

Net Profit: $854,811 (2013) Turnover: $2,424,408 (2013) PRICE: $2,650,00 REF: LH002454

Golf course living at its best RARE GYMPIE MANAGEMENT RIGHTS

Tyler Millar Mobile: 0411 271 761 Brisbane office: (07) 3878 3999 Email: tylermillar@resortbrokers.com.au

Net Profit: $185,000 PRICE: $ 1,127,000

REF: MR002555

his is a rare opportunity to acquire the management rights of a large mixed use complex in a fast growing region with strong rental demand. The complex offers accommodation for overnight, short-term or long-term stays. Located in Gympie, it is just off the Bruce Highway about two hours north of Brisbane. The short-term accommodation is utilised by a number of government and corporate clients. Perfectly positioned on Gympie’s golf course. Not just any course, it is in fact an 18-hole championship par 70 course with undulating fairways with good tree coverage. Gympie Pines Fairway Villas offers a friendly, laid back lifestyle, all within minutes of this growing town’s business centre.

The complex offers a range of one, two, three or four bedroom villas with spectacular views to the mountains and the golf course as the backyard - no fencing here! Majestic hoop pines, ancient gums and mature natives line the fairways, attracting an abundance of local wildlife. In fact, you may even have a visitor or two for breakfast on your balcony! The historic town of Gympie is the main entrance into the delights of Cooloola Beach, Great Sandy National Park. The glories of Fraser Island and Noosa’s beaches are just 40 minutes south. There are a total of 54 units in the complex at present with a final stage of a further 36 apartments to be constructed in the future. • 44 apartments in managers letting pool • Spacious two bedroom, two bathroom residence with office and additional room for third bedroom or media room • 21 years remaining on agreements • $74,000 body corporate salary • Swimming pool, teppanyaki BBQ and recreation room/gym

RESORTBROKERS.COM.AU

Editorial

Federal budget review TONY ROSSITER - HOLMANS ACCOUNTANTS Introduction The Federal Treasurer, Mr Wayne Swan, handed down his sixth Federal Budget on 14 May 2013. The 2013 – 2014 Federal Budget could be described as a moderate one in the context of the current Budget Deficit of $18 billion. It aims to set a pathway to return the Budget to balance in 2015 – 2016 and into surplus by 2016 – 2017, but with continued investment in the economy. In terms of revenue measures, the Federal Budget largely aims to protect the corporate tax base from international profitshifting and erosion, close loopholes and better target concessions. Following are the taxation and superannuation highlights. Business Taxation Further Extension of Monthly PAYG Instalments The Australian Government has already announced that it would extend the requirement to make monthly PAYG income tax instalments to include all large entities in the PAYG instalment system, including Trusts, Superannuation Funds, sole traders and large investors. After much speculation, it was confirmed that the proposed changes would not impact small and medium enterprises. Increased Funding for Targeted Tax Compliance The Australian Government will provide $67.9 million over 4 years to the Tax Office to undertake compliance activity in relation to Trust structures. A Trust Taskforce will target the exploitation and use of Trusts 8

RESORTBROKERS.COM.AU

by taxpayers. In addition, the Australian Government will provide $109.1 million over 4 years to the ATO to increase compliance activity targeted at restructuring activity that facilitates profit shifting opportunities. We expect that the Tax Laws surrounding Trusts will continue to be reformed and that the Australian Government will use intelligence gathered by the ATO in these compliance initiatives to guide the next phase of its consultation on Trust Taxation Law Reform. The vast majority of Management Rights owners operate through tax friendly Trust structures. To safeguard against inadvertently ending up under the scrutiny of the Trust Taskforce, we recommend consulting your Accountant to ensure your Trust structure remains compliant and continues to provide you with the tax effective measures it was established to achieve. Personal Taxation Medicare Levy Increase to 2.00 per cent Confirmed to Fund Disability Care The Federal Budget Papers confirmed that the Medicare Levy would be increased by 0.50 per cent to 2.00 per cent with effect from 1 July 2014, to help fund the Australian Government’s proposed National Disability Insurance Scheme (NDIS) – now renamed DisabilityCare Australia. This would also mean the effective top marginal tax rate would become 47.00 per cent from that date.

Increasing the Medicare Levy also requires consequential amendment to other tax rates that are linked to the top marginal rate and the Medicare Levy, such as increasing the rate of tax in respect of the fringe benefits taxable amount of an employer for a year of tax from 46.50 per cent to 47.00 per cent. Phase Out of Medical Expense Tax Offset The Australian Government is to phase out the net medical expenses tax offset. There will be a two step phase out of the medical expense tax offset. Taxpayers who claimed the offset in 2012 – 2013 will be able to claim it in 2013 – 2014. Taxpayers who claim the offset in 2013 – 2014 will be able to claim it in 2014 – 2015. However, an offset can only be claimed by such taxpayers from 2015 – 2016 for medical expenses relating to disability aids, attendant care or aged care. Consequently, taxpayers who do not claim the offset in 2012 – 2013 cannot claim it in 2013 – 2014 or later income years – except if the net medical expenses relate to disability aids, attendant care or aged care. Confirmation that Self-Education Expenses are to be Capped The Federal Budget Papers confirmed the Treasurer’s 13 April 2013 announcement that the Australian Government would introduce a $2,000 cap on tax deduction claims for work related self-education expenses per person from 1 July 2014. Superannuation - No New Superannuation Measures Announced The Australia Government did not announce any new major superannuation measures in the Federal Budget. Nevertheless, the Federal Budget Papers provide some further details in relation to the range of recent Superannuation Reforms previously announced on 5 April 2013, which included: Tax-free pension earnings capped at $100,000 The tax exemption for earnings on Superannuation Fund assets supporting income streams will be capped at $100,000 per annum per person from 1 July 2014. Under the proposed reforms, a tax rate of 15.00 per cent will apply for Superannuation Fund earnings – such as dividends, interest, rent and realised net capital gains – on pension assets above $100,000 (to be indexed to CPI in $10,000 increments). The installation of a $100,000 threshold above which a 15.00 per cent tax rate will apply to earnings on Superannuation Fund assets supporting current pensions will require Trustees to review the Superannuation Fund’s investment strategy ahead of the 1 July 2014 start date. Trustees currently looking to undertake significant investments in real property may also need to consider appropriate investment structures – such as a Unit Trust – which could enable the asset to eventually be sold gradually over several income years to stay under the $100,000 annual threshold.

Higher concessional contributions cap The Australian Government is still committed to introducing legislation to deliver its proposal for a higher concessional contributions cap of $35,000 for people aged 60 or over from 1 July 2013 (or 1 July 2014 for people aged 50-59) instead of the general concessional cap of $25,000. Once this legislation is finalised, taxpayers aged 59 on 30 June 2013 should consider reviewing their salary sacrificing arrangements, deductions for personal contributions and transition to retirement (TTR) pensions to take into account the proposed higher concessional cap of $35,000 for 2013 – 2014. Withdrawal of excess concessional contributions The Australian Government will allow all individuals to withdraw from their Superannuation Fund any excess concessional contributions made from 1 July 2013. Taxpayers on the top marginal tax rate may have a slightly higher tax liability (due to the additional interest charge) if they choose to withdraw any excess concessional contributions which would be taxed at the top marginal rate in their hands in any event. As such, taxpayers on the top marginal tax rate may be better served by leaving the excess contributions in their Superannuation Fund and simply paying the excess concessional contributions tax of 31.50 per cent (on top of the 15.00 per cent contributions tax paid by the Superannuation Fund). The taxpayer can still use a release authority to withdraw an amount from her or his Superannuation Fund to pay the ECT liability.

My Prediction

TONY ROSSITER HOLMANS ACCOUNTANTS Generally we are seeing a lack of consumer confidence (as expected) in the lead up to the Australian Federal Election in September 2013. Economic indicators suggest, however, the economy should be delivering stronger trading results in the Australian accommodation sector than is currently being reported anecdotally. With many infrastructure projects currently on hold pending the outcome of the Australian Federal Election, a strong performance in the back half of the 2013 – 2014 financial year is anticipated. 9

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The proposed tax changes contained in the Federal Budget are summarised in the table below:

Business and Personal Tax Proposed Reform

Proposed Start Date

Establishment of ATO Trust Taskforce

Immediate

Increase in Medicare Levy low income thresholds

1 July 2012

Phase out of net medical expenses tax offset

1 July 2013

Increase in Medicare Levy by 0.50 per cent

1 July 2014

Annual cap $2,000 on work-related self-education expenses

1 July 2014

Deferral of 2015 – 2016 personal income tax cuts

1 July 2015

However, a taxpayer on the top marginal tax rate should consider withdrawing any excess concessional contributions which would otherwise automatically flow through and trigger a breach of the $450,000 bring forward rule for any non-concessional contributions. In this situation, the proposed withdrawal option may help to prevent a severe ECT penalty with an effective tax rate of up to 93.00 per cent. Summary Most proposed Federal Budget measures are to apply from 1 July 2014. However, with an Australian Federal Government election set for 14 September 2013, there is no guarantee any or all of the Federal Budget measures will be implemented as policy, with the exception of the National Disability Insurance Scheme (NDIS) – now renamed DisabilityCare Australia, which has received bipartisan support. Generally the proposed Federal Budget measures appear to be cost neutral to small and medium enterprises in the Accommodation & Tourism sector. With

current record low interest rates and downward pressure on exchange rates, the current economic environment provides ideal conditions for continued improvement in the Accommodation & Tourism sector in the financial year ahead. The Queensland State Treasurer, Mr Tim Nicholls, will hand down the Queensland State Budget on 4 June 2013. The Queensland State Government has announced its commitment to lowering the cost of living, whilst investing in front line services and growing a four pillar economy. Our Queensland State Budget Review will be published in the next edition of The Informer. The information, recommendations, opinions or conclusions provided above are generic in nature and do not express individual advice. You should always consult your professional representatives before taking any action. Holmans welcome any queries you may have in relation to the above matters.

Myths Vs Realities:

Editorial

listing your management rights GLENN MILLAR - RESORT BROKERS AUSTRALIA MYTH 1 A number of managers believe their complexes are worth more than it is because they compare it to what they see other complexes are “listed at.” But the truth is that these other listings are not “selling for” these prices at all. What they are doing is comparing their businesses value to others listing prices. over fifty percent of management rights on the market today are overpriced and unlikely to sell at the advertised price and these “asking prices” certainly do not reflect value nor what turn out to be settled sales. REALITY The best way to price your business, to achieve that goal is work with your preferred broker to determine the range of values for which the rights is likely to sell for (taking into account the marketing efforts of your agent, of course), and then price your rights in that range, Pricing your rights what you paid for it years ago simply won’t work as markets

evolve all the time MYTH 2 Let’s put a high price on it and negotiate down. REALITY Pricing your rights too high eliminate many potential buyers - Hers why: Most buyers, when searching for a business have a ceiling price on what they are considering, based on their financial capacity. Let’s say that it’s $800,,000 to $820,000 so they simply don’t look any higher. Why can’t you just list your rights at a very high price and then reduce it later if there is no interest? Because the artificially high price will have already created a negative emotional impact on prospective buyers and be seen as a stale listing, and that will be associated with the business even after the price is reduced. I’ve witnessed this > Continues on page 10 RESORTBROKERS.COM.AU 9

Editorial

At last – clarity on class 2 buildings JOHN MAHONEY - MAHONEY LAWYERS

• Whether or not it was desirable for apartments in such buildings to be let out for short term accommodation was irrelevant; • There was no evidence that the apartments being utilised for short term accommodation were a danger; and • The Board erred in law in making its findings, its decision should be quashed and the matter sent back to a differently constituted Board for determination in accordance with the law. So whilst the matter has been sent back to the Building Appeals Board for further determination, the clear intimation from the Supreme Court is that the Board should follow the Court’s reasoning and make a final determination that a class 2 building can lawfully be used for short term and holiday accommodation.

My Prediction In what is one of the most important decisions ever for the management rights industry in Australia, the Supreme Court of Victoria today handed down a decision as to the ability to use class 2 buildings (like most holiday and short term apartment buildings in Brisbane and the east coast of Australia) for short term and holiday accommodation. The decision overcomes the previous uncertainty generated by the former Queensland State Government’s discussion paper on the issue and clarifies the true position. The case concerned an appeal by a property manager to the Supreme Court from a decision of the Victorian Building Appeals Board. The Board had ruled that the use for short term accommodation of apartments in a class 2 building contravened the Building Act and the Building Code of Australia (BCA).

The primary reason given for that was that reference in the class 2 definition in the BCA to “dwelling” did not extend to short term residential usage. Some apartment owners in the building at Docklands in Melbourne became parties to the appeal, also arguing that short term letting was unlawful. In handing down its decision, the Supreme Court ruled: • The Board misconstrued the BCA when interpreting the word “dwelling” as excluding short term residential usage; • The concept of dwelling encompasses short term holiday accommodation; • There is no rational basis for limiting the word dwelling to just long term residential usage; • Whilst the Board may be an expert tribunal, it does not have jurisdiction to make errors of law;

JOHN MAHONEY MAHONEYS LAWYERS There are 2 critical factors - the Aussie dollar and people’s confidence. The high Aussie dollar has cost jobs and damaged our tourism industry. Interest rates will remain low and maybe go lower, and with an almost certain change of government in September, I can see a lower dollar and a steady increase in confidence. The economy and tourism should be steady until early 2014 and then gradually improve through to the end of the financial year.

Myths Vs Realities: listing your management rights > Continues on page 11 phenomenon first hand many times. In addition, the seller will likely be burdened with the label “unreasonable” and prospective buyers will simply move on to greener pastures--and there’s lots of pastureland out there. MYTH 3 Let’s give the listing to Johnnie on the spot who turned up on a call yesterday. He told me had had plenty of buyers waiting. REALITY “For years, brokers have lured sellers by claiming to have lots of buyers. But when the sellers sign-up with the agents, the 10 RESORTBROKERS.COM.AU

buyers vanish. MYTH 4 Minor repairs on the managers residence can wait until later. There are more important things to be done, buyers won’t notice it. REALITY Minor repairs make your residence more marketable, allowing you to maximize your return (or minimize loss) on the sale. Believe me buyers do notice. MYTH 5 When you receive an offer, you should make the buyer wait. This gives you a better negotiating position. REALITY

You should reply immediately to an offer! When a buyer makes an offer, that buyer is, at that moment in time, ready to buy your rights Moods can change, and you don’t want to lose the sale because you have stalled in replying. We call it in the industry””buyer’s remorse” MYTH 6 “Discount” brokers can do an adequate job selling real estate. REALITY Promotional costs such as photographs; brochures; newspaper, magazine, external internet fees; printing; direct mail; personally distributed newsletters; professional support staff; Web-site maintenance and fees; and

Will your owner PAY to market their rental? REA thinks yes. NICK BUICK - THE ONSITE MANAGER

RealEstate.com.au has over 70% of market share for property traffic in the country. All the other portals, combined, don’t even come close to matching RealEstate.com.au’s reach. Basically, if your rentals and residential sales aren’t on RealEstate.com.au you’re neglecting almost the entire market. All that reach does come at a cost, and RealEstate.com. au’s management has been scathingly criticized by agents for many years over its aggressive price increases. The bottom line is, if you want quality, effective,

Editorial more are paid for by a full-service, full-fee agent. Discount brokers simply list your property on a website and hope. MYTH 7 You should select the broker who says they can get you the highest price. REALITY This is the oldest trick in them book: Tell the seller what they want to hear, act excited, and compliment the business to get the listing. Then you never see the broker again . Don’t buy into that. Insist on a well-researched market analysis. Select your broker based on credentials and track record, and then use market data to decide on price. 11 RESORTBROKERS.COM.AU

advertising… you pay for it. Until now, however, that payment has been largely in the form of a flat-fee, all-you-can-eat style model with agency promotional tools (that rental managers rarely care about) like logo placement, banners and feature listings coming as optional upgrades. That may well change, however, as this month RealEstate.com.au unveiled their new pricing structure – I caught up with them for a sneak peek, and it’s a game changer. Firstly, they’ve dropped the initial subscription rate but included a clause where rental agencies are ‘obligated’ to buy a minimum of 10 FEATURED listings per month. The cost of these listings with the base subscription adds up to slightly more than what a subscription was before they reduced it, so managers are not really any better or worse off than before, but now they have a bunch of FEATURE listings that need to be used (else they are charged for them anyway). That means that a lot more rental listings on RealEstate.com.au are going to start appearing as features in the next 12 months, and in the same process, STANDARD listings are going to be less effective. It seems to me, that RealEstate. com.au is creating an environment where, in order to be effective, managers have to pay for each rental they advertise on the portal to get the same sort of results they

Editorial have today as basic listings. John Cunningham of Cunninghams Property was quoted in REBOnline.com. au as saying: “The key to me is that they are putting us against each other - it is the competitive nature of what we do. “ RealEstate.com.au is encouraging managers to recover this additional marketing funding directly from their owners. Glenn Batten of First National Coomera, describes it on Business2.com. au as this: “Realestate.com.au account managers attempted to train sales teams to sell the base listing as well as addons. So this is a big stick type motivation. The model now makes it imperative that agents recoup the fee from an owner before listing. If you do not recover this cost then as realestate.com.au increases the financial pressure on your business will be immense” My agency never really had to feature a rental listing to date (in the last 8 years) and at the moment I still don’t think featured listings for rentals will be too important. But it seems to me what RealEstate.com. au hopes to is create a paradigm shift in the entire rental marketing segment with owners becoming more ‘educated’ about the importance of investing in rental marketing. Considering 3 years ago, most managers were happy to simply sit a sign out the front of their complex to market their rentals, I’m not sure the typical onsite manager will be too fast to commit to paid featured listing rentals. I’m also not convinced it will be necessary to do so, but be assured there are big changes afoot, and time will only tell.

My Prediction

NICK BUICK THE ONSITE MANAGER RealEstate.com.au indicates that traditional ‘all-you-can-eat’ advertising plans will eventually be fazed-out for all agents. Their new ‘flexi’ plans increase competition between rental listings by ordering results according to payment, rather than first-comefirst-served. This will place a greater importance on paid (featured) listings and apply pressure on land lords to contribute toward advertising costs. RESORTBROKERS.COM.AU 11

PRICE CORRECTION

esort Brokers Australia has the absolute pleasure of offering the leasehold of this amazing property. Located only a two minute drive to the CBD of Merimbula it faces directly onto Merimbula’s magnificent Short Point Beach. It has been designed to capture the northerly aspect and amazing beach panorama. Rarely do we see properties that are as idyllic as this one. All cabins have Wi-Fi, ensuites, kitchenettes and outside balcony areas. Beach Cabins has a magnificent pool area, children’s playground, direct beach and lake access, BBQs, boat parking and guest laundry. Beach Cabins is continuously booked out by couples and families visiting the Merimbula beaches and attractions. This property would be ideal for the husband and wife team wanting to work and live in an absolutely top shelf beachfront location.

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Idyllic north facing beachfront resort LEASEHOLD OFFERING - SOUTH COAST NSW • Modern spacious three bedroom, two bathroom residence • 25 pentagonal fully self-contained deluxe cabins • North facing beachfront 2.5 acre site. • Motivated vendors ready to retire • Easy to manage property • High turnover, large profit • Located in one of NSW’s busiest holiday coastal towns • Perfect lifestyle/business combination by the sea

Russell Rogers Mobile: 0416 166 909 Sydney office: (02) 9904 8224 Email: russellrogers@resortbrokers.com.au

Net Profit: $400,880 Turnover: $622,272 PRICE: $3,200,000

n offer is the freehold going concern of the The Lions Den Hotel which was established and licenced originally in 1888. The hotel has remained almost unchanged on the same site since then and is one of the oldest registered, continuously operating, hotels in Queensland that is still in its original building.

The Lions Den Hotel is situated on the Bloomfield Track, 4km from the sealed Mulligan Highway to Cooktown or 65km north of Cape Tribulation via the Bloomfield Track. The hotel has a commercial licence, bar, restaurant (inside/outside), function room and commercial kitchen. Accommodation capacity comprises of 48 beds/accommodated guests plus an expansive five acre campground (camping capacity in the order of 150 – 200 per night). The accommodation and campground infrastructure comprises of elevated safari lodges, donga rooms, amenities blocks, laundry, tearoom and powered and unpowered camping area. The Lions Den Hotel is long established as a “must see” icon of Far North Queensland for both local and international tourist markets visiting the Cooktown and Cape York region. 14 RESORTBROKERS.COM.AU

The iconic ‘Lion’s Den Hotel’ OWN A PIECE OF HISTORY

The hotel has a consistent trading history, showing strong year on year growth for the last 5 years. The current vendors have developed strong corporate partnerships with a range of companies to maximise all year round occupancy. The property has multiple revenue streams, including F&B, accommodation, merchandise and corporate partners. • The business is primarily driven and operated by a two person management team living on site, with the assistance of a number of trained staff • Two manager’s residences available - two bed self-contained elevated safari lodge with kitchen, bathroom, timber decks and fully fenced backyard or two bed self contained unit

Shane Mullins EXCLUSIVE AGENT Mobile: 0447 185 001 Brisbane office: (07) 3878 399 Email: shanemullins@resortbrokers.com.au

Net Profit: $465,000 Turnover: $1,600,000 PRICE: $2,450,000 REF: FH002472

EXCLUSIVE RECEIVERSHIP SALE

Rare large netting Brisbane permanent complex

With resort style facilities including a lap pool, a lagoon pool, tennis court, city viewing deck and two BBQ areas, this complex offers owners and tenants alike every amenity they desire at their fingertips.

INNER CITY RESORT STYLE FACILITIES

Currently there are 59 units in the letting pool consisting mainly of two and three bedroom units and townhouses. Additionally there are three penthouses and one sub-penthouse in the rental pool. The complex has a total of 156 units presenting a potential opportunity to grow the letting pool.

Tim Crooks EXCLUSIVE AGENT Mobile: 0422 208 450 Brisbane office: (07) 3878 3999 Email: timcrooks@resortbrokers.com.au

esort Brokers Australia are delighted to present for sale the management rights to Cloudlands unit complex. This inner city complex overlooks the edgy and always popular Teneriffe, Newstead, Fortitude Valley and Brisbane CBD. The community (made up of five buildings) is in an elevated position in Bowen Hills which provides spectacular river and city views in a great central location. These elements create strong rental demand all year round. The spacious manager’s townhouse boasts three bedrooms and two bathrooms.

EXPRESSIONS OF INTEREST 5th September 2013 Estimated Net profit: $271,212 Caretaker’s Remuneration $147,680 (+ GST) REF: MR002585

This business consists of five bodies corporate, all with good rapport and over half the income is derived from the very secure caretaker’s remuneration. In addition to the body corporate salary there is $10,000 supplied by the bodies corporate to assist with the gardening.

•C aretaker’s remuneration $147,680 +GST increasing by CPI • Gated community with CCTV • Well presented gardens • Walking distance to James Street Markets, Emporium cafes and the brand new Gas Works development Under instructions from Ann Fordyce & Nigel Markey of Pilot Partners as Receivers and Managers.

RESORTBROKERS.COM.AU 15

EXCLUSIVE

esort Brokers Australia is delighted to offer the leasehold of Central Queensland’s finest hotel. Located only 55km from Emerald, it is beautifully constructed and has enjoyed outstanding business from the day it opened. This property is ideal for a group or syndicate looking to run this high netting hotel under management. The hotel has been successfully run under management since its inception and the current managers are gaining huge support from the local community. They would happily stay on should they be required. The price of the lease has been based on the 2012/13 financial year’s figures. This means that the incoming purchaser can be confident in the value of their business with potential upside after the election. We anticipate the property will be back to full capacity in 12 months if the Aussie dollar continues to drop and the mining tax is dispensed, re-igniting confidence in the industry! This property is different to other offerings in mining areas as it is located in Capella which is a well established town surrounded by 9 large coal mines

16 RESORTBROKERS.COM.AU

Central Queensland’s finest hotel NEAR NEW, 83 UNIT 4 STAR LEASEHOLD all in close proximity. This means that it has a consistent business and is not reliant on just one or two mines. This property consists of two separate operations. One is made up of 63 x 4 star hotel rooms, restaurant, conference room and a very spacious three bedroom manager’s unit. Adjacent is a further 20 room, 3 star motel built over 2 levels. • Restaurant capacity 80-100 seats • Austar and Wi-Fi • Brand new 30 year lease • Pool and BBQ area • High tariffs • Very attractive street appeal • 45 minute drive from Emerald Freehold also available contact us - for more information!

Ian Crooks EXCLUSIVE AGENT Mobile: 0411 171 648 Brisbane office: (07) 3878 3999 Email: iancrooks@resortbrokers.com.au

Trudy Crooks EXCLUSIVE AGENT Mobile: 0477 882 210 Brisbane office: (07) 3878 3999 Email: trudycrooks@resortbrokers.com.au

Net Profit: $1,753,627 Turnover: $4,724,604 PRICE: $5,500,000

REF: LH002563

Priced to entice 6omins from Sydney REAL OPPORTUNITY TO BUILD THE BUSINESS Shane Wynhoven Mobile: 0424 174 592 Sydney office: (02) 9904 8224 Email: shanewynhoven@resortbrokers.com.au

Nett profit: $330,000 (forecasted 2014) Turnover: $550,000 (forecasted 2014) PRICE: $2,250,000 REF: FH002588 / LH002557

n offer is a fabulous 28 room 3 star AAA rated motel set on expansive 2 acres of lush tropical park like grounds with a 90 seat licensed restaurant. This property offers a unique opportunity to start afresh and build a quality business on the Central Coast of NSW. With a superb property on offer, a savvy operator can bring this motel to new heights via online booking sites and advertising mediums. This motel is an excellent opportunity at a great price. The motel boasts a beautiful and spacious three bedroom open plan residence with modern facilities – one of the best motel residences available.

The property is located north of Gosford town centre and only an hour from both Sydney and Newcastle. Situated in a prime location only minutes from the beautiful central coast beaches and renowned tourist destinations, as well as easy access to Blue Tongue Stadium and Gosford town centre. Call now to inspect! Some features include: • 28 x 3 Star AAA rated rooms • Air conditioned • Swimming pool • Massive park like grounds (suitable for expansion / development subject to DA) • Flat screens throughout • 90 seat licensed restaurant / conference area • Commercial kitchen • Dual street access • Just 60 minutes from Sydney

Set on over 8,000 square meters there is ample opportunity to expand and develop this property in the future (subject to DA). RESORTBROKERS.COM.AU 17

Editorial

Build on your success BY ALEX COOK - RESORT BROKERS AUSTRALIA: A QUICK CHAT WITH BLACKBURNE JACKSON DESIGN, ARCHITECTS SPECIALISING IN MOTEL REFURBISHMENT AND DEVELOPMENT.

Coral Cay Exterior

Marco Polo Interior The origins of Blackburne Jackson Design can be traced back to 1932, when Godfrey Blackburne first commenced practice in Brisbane. Since relocating to the Sunshine Coast some 40 years ago, the firm has designed several award-winning structures and has frequently been recognized by The Australian Institute of Architects and by local authorities alike. On a recent trip to the Sunnie Coast, I was fortunate enough to catch up with David Shields and Rohan Jackson, directors and leading architects at Blackburne Jackson Design. Located on Aerodrome Road in Maroochydore, their striking office/studio is a testament to the company’s ethos and capabilities (see photo). Once an Indian Restaurant, the building has been completely refurbished to create an environment that exudes style and creativity (in case you’re wondering, the smell of curry has gone). 18 RESORTBROKERS.COM.AU

Coral Cay Interior

Blackburn Jackson Design Office

Balgownie Resort Interior 1

Balgownie Resort Interior 2

Although Blackburne Jackson Design provides design solutions to a wide range of sectors, our conversation focused mainly on the firms work within the motel sector. The firm has been involved in a range of interesting and noteworthy projects in recent years, and has the motel sector earmarked for future growth. With a philosophy based on working corroboratively with their clients to produce innovative designs that match brief, budget and context, it’s easy to see why they work so naturally in this sector. Rohan explains that the company’s involvement in motel projects falls into 3 key areas; the refurbishment of existing rooms, adding rooms to existing motel sites and the development new ‘greenfield’ sites. The first 2 areas will be of particular interest to the many motel owners and operators who read this magazine. Indeed, ways of increasing

tariffs and improving occupancy are often the main topic of conversation among moteliers. Although room refurbishment is often seen as the bugbear of motel operators, it is often a relatively straightforward means to improving a business. With favorable financing terms, the cost can be absorbed by running costs. At the same time, an improved product has the ability to drive tariffs as well as occupancy. The end result is not only an improvement in the bottom line of a business, but also a means to ensuring its longevity. The addition of extra motel rooms to an existing site is not something that all operators have the option to do. But for those that do, when done correctly, it can often have profound effects on a business. Brokers MD Ian Crooks, suggests that any motel experiencing occupancy in excess of 75% is in a position where it could benefit

from the addition of more rooms. The key to both room refurbishment and room development is to know when to do it and how to it. Central to Blackburne Jackson Design’s approach is the collaborative partnership between architect and client. David explains that the first step is to gain an understanding of the client’s requirements, aspirations and limitations. From there, they can assess the property and present the opportunities that are available. The final step, of course, is to marry the client’s needs and aspirations with the options at hand. David cites the firm’s ability and willingness to adapt to the particular requirements of each individual owner and each individual property as a key point of difference. ‘We do not approach a project with a prescriptive way of doing things’, David explains. ‘Our overriding philosophy is to create innovative, sustainable and economical designs that create success for our clients’. This open-minded outlook works in both directions. ‘Clients views can often be clouded by what they’ve seen before. Sometimes we can really open people’s eyes to new ideas’. Blackburne Jackson Design’s work on the Coral Cay Resort in Mackay provides a simple but effective example of this. When they first met with the client, the firm was presented with a plan for 9 additional

motel units drawn up by a local draftsman. As the motelier was keen to build as many rooms as possible, they revisited the site plan and took a more global view. As it turned out, through some careful planning and by redesigning the car park, they were able to turn to 9 rooms into 18! I’ll let you do the numbers in regards to the extra income this uncovered. The importance of looking at the wider picture seems is to Blackburne Jackson Design’s interaction with it’s clients. David points out that moteliers are often blinkered by predetermined notions and immediate budget restrictions. ‘Although they have long-term aspirations for their property, they restrict themselves to their immediate budget and what they feel they can afford now’, David says. ‘In reality, it is much more important to have a master plan.’ By staging refurbishment and redevelopment over 2, 3, 4 (or more) stages, clients are able to work with the capital they have available and to maximise the opportunities at hand. An ongoing hotel development in Emerald provides a good example of this. Originally called in to refurbish a number original condition motel rooms, they also made plans to convert some old office on-site space into additional rooms. Due to the fact that Emerald has had a downturn of sorts recently, they have now turned their focus from creating additional rooms to the

later stages of the redevelopment (namely a large bottle shop and a night club). As you would expect from the adaptive nature of their work, Blackburne Jackson Design are equally at home with high-end resort style accommodation as they are with regional industry based motels. The luxurious Balgownie Estate in the Yarra Valley is a fine example quality end of their designs. The master-plan approach is as evident here as it is anywhere else. Indeed, this development has had several stages. Soon after the flash cellar door, 32 luxury motel rooms and restaurant opened, the owner discovered that he couldn’t meet demand. A further 36 rooms, conference centre and expanded restaurant were added. The pervading sentiment I got from my time with David and Rohan was their overriding desire to work with people to help them realise their dreams. So often in the design world, you come across professionals looking to impose their ideas, This couldn’t be further from the truth at Blackburne Jackson Design. If you’re looking to explore how you can maximise the potential of your motel, I would highly recommend having a chat with these friendly architects. You never know what might come of it! To have a look at what they can offer, visit www.blackburnejacksondesign.com. au/motels.html

Architecture advert

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RESORTBROKERS.COM.AU 19

On offer is the leasehold interest of 24 serviced villas and townhouses in the eastern Melbourne suburb of Glen Waverley. With no requirement for an onsite reception and easily operated by telephone and internet bookings this property is a breeze to run. The business has been successfully operated in this way for over 6 years. The complex is made up of 24 apartments and townhouses; 3 x one bedroom, 5 x two bedroom and 16 x three bedroom apartments. All apartments are tastefully furnished, have laundry facilities and offer Wi-Fi access and Foxtel service.

2.35 x multiplier (business return 42.4%) LEASEHOLD SERVICED VILLAS • Independently operated and 4 star self rated • During the last 18 months the vendors have updated furniture, décor and kitchen items • All TV’s have been replaced with 32” flat screens • The majority of washing machines, dryers, refrigerators and couches have been replaced • Lease terms range from one to five years • Rental increases by negotiation.

Impressive residential CBD apartments PERMANENT COMPLEX - CORPORATE CLIENTS Nett profit: $98,000 PRICE: $1,045,000

Steve Campbell EXCLUSIVE AGENT Mobile: 0407 220 668 Brisbane office: (07) 3878 3999 Email: stevecampbell@resortbrokers.com.au

REF: MR002488 20 RESORTBROKERS.COM.AU

Ten storey residential building located in inner western Brisbane suburb of Milton. You will have the lifestyle you have always dreamed of. Offering one,two,and three bedroom apartments, townhomes, skyhomes and sky garden apartments. Close to bus and rail, the inner city bypass, Toowong Village shops and schools. All of this and much more is on offer with this high calibre sophisticated development, situated in a very friendly and convenient location.

Nett profit: $200,579 (2011/2012) Turnover: $911,945 (2011/2012) PRICE: $425,000

Jim Chapman EXCLUSIVE AGENT Mobile: 0413 444 782 Melbourne office: (03) 9347 3100 Email: jimchapman@resortbrokers.com.au REF: MR002565

• All apartments are well appointed, spacious and have large exterior balconies • Gourmet kitchens and a lap pool for the health conscious • First time offered to the market since 2007 • 34 units, 17 of which are in the letting pool • All apartments except one in the pool are furnished and cater to corporate rental market • Only 1.5kms west of the CBD and 50 metres from trendy hub of Milton’s Park Road • $45,600 body corporate remuneration (adjusted annually to CPI) • Average rental rates $500-$790 per week

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 21 RESORTBROKERS.COM.AU

RESORTBROKERS.COM.AU 21

Editorial

Crystal ball snow job for 2013 / 14 BY MIKE O’CONNOR

When I was living in Los Angeles I developed the habit of dropping by one of the many nail clinics in my neighbourhood and having a manicure. One afternoon, the Vietnamese lady who always attended me took my hand, looked closely at my palm and said: ``How many wives have you had?’’ “One’’ I replied. “You’ll have two’’ she said and resumed filing and clipping. She was right as it turned out, and I’ve often wondered how you would deal with being able to forecast the future with such certainty. I’ve tried forecasting the order in which race horses will cover a pre-determined distance and the numbers which will tumble from the Gold Lotto barrel and the results to date have not been encouraging. Then again I’ve only been trying to crack “the big one’’ for around 30 years. As my father died at the age of 89 still trying to crack it, perhaps more patience is required. 22 RESORTBROKERS.COM.AU

My psychic powers, then, are lacking but with a new financial year looming I’ve borrowed a crystal ball – a glass paperweight actually, crystal balls being hard to come by - and peered into the future. The first thing I saw was heavy snowfall. I interpreted this as indicating an imminent climate change so dramatic that Brisbane would experience its first white Christmas. Then I realised that the paperweight was actually a snow dome and that I’d shaken it when I‘d picked it up. Forget the snow but I could definitely see fireworks in the future as people around the nation celebrated the end of the longest federal election campaign in the nation’s history. Come September all those people, including myself, who had locked themselves in a dark room for six months to avoid being driven insane by political advertisements will emerge blinking

into the light to discover the political landscape has changed. Who won? The snow dome was a little vague on detail but I made out a pair of men’s Speedos swirling in its mists so I think it safe to presume Tony Abbot will be Prime Minister, leaving Julia Gillard to open a hairdressing salon on the Gold Coast and blame Kevin Rudd for everything. Mr Abbott will have the distinction of being one of the few Prime Ministers elected not because people liked him but because they didn’t dislike him as much as his opponent. The federal Labor Party will be shredded, the scramble of doomed MPs fighting for jobs within the trade union bureaucracy akin to scenes on the boat decks of the Titanic. Clutching their taxpayer subsidised super, the Big Guns will retire on $100,000 plus a year indexed pensions and blame Kevin Rudd for everything. The rest will hand in the keys to the taxpayer funded car and office and face life in that horrible, real world outside Canberra where they have to pay for things with their own money and where they will blame Kevin Rudd for everything The economy, freed of the constant turmoil of political conflict and the uncertainty it generates, will begin to improve in the New Year after stumbling through 2013. Property prices will start to rise and I have a very good reason for saying this. I have an investment property and if enough people read this and believe it, I might be able to sell it and make some money. The Australian dollar will slide further but we will continue to holiday overseas, exploding the myth that we do so because of the high Aussie dollar. Tourism authorities then spend several million dollars on a study that finds Australians holiday overseas because they like to travel to foreign countries. Imagine that? Clive Palmer buys what’s left of the Australian Labor Party for $5 million, declares himself to be leader of the Opposition and moves to Canberra where he travels around the national capital in a carriage hauled by newly unemployed Labor MPs dressed in dinosaur suits. The Chinese government’s investment corporation does a deal with the Tasmanian state government, buys the island and tows it back to China after bidding unsuccessfully for New Zealand. Two months later, someone on the mainland notices Tasmania is missing but it’s too late. Just kidding. Really. When it comes to crystal ball gazing maybe Mahatma Gandhi got it right when he said: “The future depends on what you do today.’’

On offer is one of the very few residential management rights in Victoria. This solid brick townhouse/villa secure facility was built in 2001 and has a caretaking agreement in excess of 19 years. This complex is located in a fantastic position within walking distance to Watergarden Shopping Centre and railway station. Additionally, the business is in easy commuting distance to Melbourne CBD and Tullamarine Airport. This secure residential townhouse/villa complex has a variety of facilities including a pool, gym and landscaped gardens. It offers an ideal environment for rental tenants and owner occupiers.

Residential management rights NORTHERN SUBURBS - MELBOURNE • Caretaking agreement 19 years from March 2013 with salary close to $95,000 • The manager’s residence is a three bedroom, two bathroom fully self contained two storey townhouse with double garage and secure backyard • The reception/office is situated within the townhouse and has a separate entrance • With limited office hours and manageable caretaking duties this would suit a couple with one able to maintain outside employment

Nett profit: $145,000 PRICE: $920,000

Jim Chapman EXCLUSIVE AGENT Mobile: 0413 444 782 Melbourne office: (03) 9347 3100 Email: jimchapman@resortbrokers.com.au

REF: MR002542

Are You an Onsite Manager? Market Your Listings EVERYWHERE: (for just one VERY low annual fee and ZERO commissions!)

Plus your own, FREE, custom designed website

Discover how we can save you thousands in marketing, call 07 3868 4047 RESORTBROKERS.COM.AU 23

esort Brokers is proud to have been appointed to market the management rights and associated real estate of Culgoa Point Beach Resort. Nestled on the banks of the pristine Noosa River amidst three acres of tropical, landscaped gardens and a private beach, this is one of a handful of absolute beachfront resorts on the Sunshine Coast. The complex offers a choice of spacious one, two or three bedroom apartments and loft style penthouses. All apartments are fully self contained with spacious entertainment areas and balconies offering water views. Luxuriously appointed over two levels, the loft style penthouse apartments offer two bedrooms, two bathrooms and a spa bath. All penthouses are located on the top level and offer beautiful views of the Noosa River. Culgoa Point Beach Resort also offers a unique venue for wedding ceremonies. The private beachfront is perfect for a beach style ceremony for up to 100 guests. The combination of white, sandy beaches, stunning river views and spectacular sunsets ensure the perfect backdrop. 24 RESORTBROKERS.COM.AU

Iconic Noosa waterfront LARGE SUNSHINE COAST MANAGEMENT RIGHTS

The private marina jetty provides easy access for boat mooring for chartered cruises. • One of the only management rights businesses on the coast with a professional systemisation of the business in place with BIAB. All aspects of the business have been documented and systemised • The complex features 65 apartments in total with 54 in the current manager’s letting pool • The net income for the year ending March 2013 was $625,000. • The agreements are 10 years and will be topped up to the full 10 years on settlement • The manager’s residence is a spacious two bedroom, two bathroom apartment opening out onto a lawn area

Glenn Millar Mobile: 0412 277 804 Brisbane office: (07) 3878 3999 Email: glennmillar@resortbrokers.com.au

Net Profit: $ 625,000 PRICE: $ 3,450.000

REF: MR002532

EXCLUSIVE

Exceptional business return EXCELLENT CENTRAL QUEENSLAND MANAGEMENT RIGHTS Neville Littleton EXCLUSIVE AGENT Mobile: 0407 727 194 Brisbane office: (07) 3878 3999 Email: nevillelittleton@resortbrokers.com.au

husband and wife team can work five days a week and net $4367 each week, providing a 30% return on the business and an overall return of 19% (business and real estate). This complex is enjoying the Central Queensland mining influence which is facilitating higher and higher rents and a 100% occupancy rate.

Net Profit: $227,095 PRICE: $1,200,000 incl. managers unit and office block REF: MR002103

The body corporate supply and maintain all the caretaking equipment and pay a gardener two days per week to mow and assist with the caretaking duties. The body corporate also supply all the consumables. Wattle Park, often referred to as The Oasis in Central Queensland, is situated

in a quiet northern suburb in a flood free area north of the mighty Fitzroy River. It is just a short drive to the Rockhampton international size airport. Resort Brokers Australia is able to provide a new valuation to substantiate price, so finance should be a breeze. Redundant? Buy A top Job. Be your own boss. No fly in fly out. No weekend work. • The manager’s residence is part of a freestanding office block • It is a spacious first floor one / two bedroom unit • Large income earning ground floor office, computer room and laundromat • Large ground floor covered meeting / recreational area • Large income business in a high rental demand location • No office hours in the new 25 year agreements. • 70 units - 63 in the pool • Option to rent out the managers unit and rent a luxury 3 bed room unit in the complex DON’T DELAY - BUY THIS MANAGEMENT  RIGHTS! RESORTBROKERS.COM.AU 25

Iconic Australian Island Ad 1st TIME OFFERED - EXPRESSIONS OF INTEREST CLOSES 20th SEPTEMBER 2013

Ian Dore

SENIOR BROKER 26

Mobile: 0412 752 238 Brisbane office: (07) 3878 3999 RESORTBROKERS.COM.AU Email: iandore@resortbrokers.com.au

dventure/Events Business

LOCATED ON BEAUTIFUL SOUTH STRADBROKE ISLAND ON THE GOLD COAST, QUEENSLAND AUSTRALIA, our Eco Certified businesses are a short calm water cruise from the heart of Australia’s Tourism Mecca, Surfers Paradise. Established 13 years ago this is a high profile Brand offering ‘in-demand’ experiences appealing to all age groups. These Iconic Multi Tourism Award Winning businesses are offered for the 1st time for sale including existing management (if required) by EXPRESSION OF INTEREST closing Friday 20 September 2013, if not sold prior. BUSINESSES FOR SALE 1. McLarens Landing Island Resort incorporating Restaurant, Bars, multi-Function Events centre, Tipplers Tavern with the capability to cater for upwards of 2500 guests at a time. Easily accessible by boat, sea plane or helicopter. State Government & Gold Coast City Council support for further development. Repeat Venue for major Events and Functions by national corporations. Unique Flora and Fauna with Government permits to interact with wild animals. Huge growth potential due to increased Asian tourists to the Australian market. 2. Tall Ships Sailing Cruises Australia Pty Ltd operates Sir Henry Morgan the iconic three masted Tall Ship is fully licensed to cater for 70 passengers and operates charters for Functions or acts as an Island transfer vessel. 3. Gold Coast Island Adventures Pty Ltd incorporating company owned exclusive adventure tours on South Stradbroke Island including Paraflying - 4WD Eco Island tours - Segways Island Adventures. 4. Whale Watching Gold Coast Pty Ltd offshore Whale Watching- Dolphins tours from May-November. 5. Our Vessels: 32m High Speed Catamaran This 5 Star multi-million dollar vessel is the largest and most stable vessel operating on the Gold Coast. Its fully air-conditioned and licensed for 280 guests to transfer day guests daily to the Island Resort as well as whale watching in season and on-board charters, Tallship (as above) and Paraflying boat. 27 RESORTBROKERS.COM.AU www.goldcoastadventures.com.au

RESORTBROKERS.COM.AU 27

esort Brokers Australia are proud to present the leasehold offering of the Atherton Hinterland Motel - located right in the centre of Atherton. The property comprises of 16 motel rooms and a two bedroom apartment, as well as a guest laundry, meals to rooms (Monday to Thursday), spacious reception area and a one bedroom managers studio apartment. The motel has been owned for the last seven years by the freehold owners and they have recently refurbished inside and out. There is a real opportunity for a new lessee to capitalise on strong business with plenty of up-shot. The Tablelands region is an area covering 64,768 square kilometres of diverse landscapes including world heritage rainforest and crater lakes, expansive savannahs and wetlands, along with a variety of rural and agricultural farming. Located in Tropical Far North Queensland extending west of Port Douglas, Cairns and Innisfail, there are several major towns around Atherton.

28 RESORTBROKERS.COM.AU

A worthy opportunity NEW 30 YEAR LEASE

The Atherton Hinterland Motel is ready for business. The vendor has a variety of final renovations to complete and will work closely with a new lessee to meet realistic timelines. The up-shot will be created over the next year providing a secure and comfortable business for the future! This is a great starter motel.

Shane Mullins EXCLUSIVE AGENT Mobile: 0447 185 001 Brisbane office: (07) 3878 399 Email: shanemullins@resortbrokers.com.au

WHAT ARE YOU WAITING FOR! • Easily run by a couple with the assistance of two casual cleaners • 3.5 star (WOTIF rated)  • Manager’s residence - fully renovated one bedroom studio apartment • Ample parking for each unit and extra spaces for visitors • Free Wi-Fi - 5 access points for full coverage around the motel

Net Profit: $160,000 PRICE: $525,000

REF: LH002541

superb passive investment structured perfectly for Australian ownership. This resort is a combination of a hotel and a management rights, along with solid spa, restaurant and bar. The property boasts a multitude of Trip Advisor and other awards and is recognised as a leader in the field of luxury spa and villa resorts. For a company looking to expand into South East Asia or a group of passive investors, you could gain the benefit of a decade of fine tuning of systems. These systems allow remote ownership while everything is measured on a daily basis by a group of expat Australian industry veterans. Set in beautiful Seminyak, the property cannot be built out and with current land prices, new villas are not coming onto the market as the developers focus on multi storey developements. The ownership is fully secured in a foreign company you own 1o0% of. There are long term leases currently secured to 2049. Bali is a peaceful Hindu island where the demand from tourists is ever increasing.

30 RESORTBROKERS.COM.AU

Bali passive investment under full management AUSTRALIAN OWNED AWARD WINNING RESORT So whether you are an Australian company looking for growth into South East Asia or looking for straight investment with solid cash flow, this resort is sure to impress.

Ian Crooks Mobile: 0411 171 648 Brisbane office: (07) 3878 3999 Email: iancrooks@resortbrokers.com.au

Contact us now for an 18 page investment memorandum. • USD$1.85m EBITDA passive investment • Australian experienced management • Fully systemised set up allows remote ownership • Multi award winning • Prime Seminyak location never to be repeated • First time ever offered to the market

Steve Dawson Bali mobile: +62 813 376 89 000 Email: steve@prsbali.com

Net Profit: USD$1,850,000 Turnover: USD$6,000,000 PRICE: USD$9,500,000

EXCLUSIVE

Freehold ready to go! YES YOU HEARD RIGHT A FREEHOLD MOTEL! A RARITY IN MOTEL WORLD Len Booth EXCLUSIVE AGENT Mobile: 0438 139 422 Brisbane office: (07) 3878 3999 Email: lenbooth@resortbrokers.com.au

Net Profit: $372,493 (projected) PRICE: $1,500,000

REF: FH002538

his motel has enormous potential for a new owner with fresh enthusiasm, ideas and a hospitable personality. It’s fair to say the property is in need of a little TLC and would benefit hugely from a hands on operator. Who knows, somewhere down the track when retiring looks inviting, you could sell the lease and receive rent to assist in a gentler lifestyle. Perhaps it’s also perfect for the experienced motelier who no longer wants to pay rent to a landlord and is keen to reap the benefits solely of his own work. There is a licenced restaurant and bar on the premises - however it no longer opens, sending customers elsewhere. Another opportunity for a progressive buyer perhaps?

Maryborough is situated just two hours from Brisbane and enjoys easy travel via air from Hervey Bay to both Brisbane and Sydney. Also, the tilt train is on a regular service. The history and perfectly restored heritage homes and buildings of Maryborough are a draw card to those seeking a link to the past. When quieter times call Hervey Bay is only 30 kilometres away offering white beaches, speedway and a bevy of restaurants to enjoy coastal views. This property offers a chance to build and improve with refurbishment, hospitality, consistency and enthusiasm. Reaping the rewards at the end will prove to be more satisfying than purchasing from a landlord who has prepared for sale... worth thinking about! • Two bedroom owner’s accommodation close to reception for ease of management • Two storey brick building with iron roof (little maintenance) • In-ground pool and BBQ area as well as covered patio for guest use • AAA 3.5 star rating • 2023m2 within 500m of CBD • Budget chain member • Off street parking for trailers and boats RESORTBROKERS.COM.AU 31

Editorial

t the dawn of a new financial year, shouldn’t we feel a sense of renewed purpose, an enthusiasm for what might be achieved? Yet, with all the pre-election political upheaval in Canberra, we seem to have entered a kind of holding pattern. Unsure of the future, we crave confidence and certainty. On the face of it, Australia has performed well, a bright spot in a world of economic casualties. Yet consumer and business confidence have continued to seesaw. Electioneering politicians talk up a “budget emergency”, and the GFC has turned our country of spenders into a nation of savers. So just what are our economic prospects? What should we expect in the tourism and property sectors over the short to medium term? The latest Tourism and Hotel Market Outlook (Q1 2013) by Deloitte Access Economics was cautiously optimistic. “Overall, global economic prospects are beginning to look more favourable,” it noted. While output in the Eurozone would remain essentially flat this year, growth in the US was forecast to be 2.2% and China was expected to grow by a solid 8.2% in 2013. “The main impetus for growth over the next year will be interest rates, which are at historically low levels and should help lift housing construction, retail spending and capital expenditure,” the report said. Australian GDP growth was expected to be “a moderate 2.7% in 2012-13 and 2013-14 before improving gradually from 2014-15.” International visitor nights, Deloitte predicted, would grow at an average annual rate of 4.7% over the next three years, while the outlook for domestic visitor nights growth was “moderate but encouraging” at an average of 1.3% p.a. 2012 saw national occupancy rates hit a record 66.1%. This was forecast to increase further to 68.2% by the end of 2015. Room rates, which grew by 3.3% over the course of 2012, were predicted to grow by an average of 3.7% p.a. to reach $167 in 2015. Average yield per room (RevPAR) was expected to increase by 4.8% p.a. over the next three years from $99 per room in 2012 to $114 per room in 2015. Of course Deloitte Access Economics takes a very analytical approach. They don’t measure such intangibles as confidence levels and political impacts. For a more subjective view, we asked a panel of respected tourism and property industry experts to gaze into their crystal balls and give us their informed predictions. It was a tough challenge, especially as the political landscape was thrown into such a state of flux. It is fair to say, most were expecting a change of government, given the polls had long favoured the Coalition. But then came the dramatic prime 32 RESORTBROKERS.COM.AU

What lies

PREDICTIONS FOR OU

ministerial switch. While expectations of a Liberal-National win remained strong, despite Kevin Rudd’s resurrection, it was suddenly a brave move to forecast anything with certainty on the political front. The great hope expressed by all was that the Federal election would deliver one thing – certainty, leading to a significant lift in business and consumer confidence. Several consistent themes emerged in our pundits’ views. Increasing Asian affluence, low interest rates, and a weaker Australian dollar are repeatedly cited as critical economic growth drivers. Most agreed there is an urgent need to improve labour market flexibility and for capital investment in new tourism infrastructure. Universally, our forecasters believe it is tourism’s time to shine.

OUR INDUSTRY ‘FORTUNE-TELLERS’

ANDREW McKEVOY Managing Director of Tourism Australia since 2010. Andrew has had more than 20 years of tourism and media experience, including as CEO of the South Australian Tourism Commission.

ahead?

UR ECONOMIC FUTURE BY CATIE LANGDON

OUR INDUSTRY ‘FORTUNE-TELLERS’

OWEN BARBLER Brisbane-based Associate Director of independent property valuations and advisory firm, m3property. Owen has worked in the valuation industry for more than a decade, and specialises in going concerns, in particular accommodation properties. What will be the important economic drivers in Australia in 2013-14? Andrew McEvoy: The continued growth of the Asian middle class and the return to confidence of the USA. This alongside some solid but low growth from the UK and Europe and the emergence of new travelling economies such as Brazil will be great for the Australian visitor economy the country’s largest services export. Rodger Powell: Business confidence that leads to capital investment and increased employment is the most important. This can be stimulated by Government moves to improve the regulatory environment where it affects productivity, and by Government investment in much needed infrastructure – again where the Infrastructure improves productivity and creates jobs. Ian Crooks: Mining has been an incredibly important economic driver. The heat may have come out it as the very high prices being paid for coal and iron ore have eased back. But I believe the positive impact of mining will still be strong. There are a lot of coal-fired power stations in China and India that need to be fed and, as the middle classes grow in those countries, demand will be even greater. With a change of government, which I still expect, I also hope to see the cattle industry rebound strongly. One of the biggest drivers of our economy over the next five years will be food sales to Asia – beef and grain.

RODGER POWELL Managing Director of Tourism Accommodation Australia (TAA, a division of the AHA). Rodger has a 25-year history in senior roles in the accommodation and tourism industry, including as CEO of regional tourism authorities, and directorships of sporting, tourism and marketing organisations. 33 RESORTBROKERS.COM.AU

IAN CROOKS Founder and Managing Director of Resort Brokers Australia, the nation’s first and largest agency to focus solely on accommodation business and property sales. Ian launched the business in 1985 after achieving success in both motel operation and real estate.

Owen Barbeler: If I were to pick three, it would still be the mining/resources sector (although, investment in this sector is slowing), low interest rates, which are supporting the economy and expected to be cut further this year, and the political certainty and policies of the government that will follow the election result. > Continues on page 36 (next page) RESORTBROKERS.COM.AU 33

Editorial What lies ahead: predictions for out economic future continues... What sectors are vital to strengthen and grow the economy in 2013-14 and ahead? Andrew McEvoy: Health care, tourism, education and other services sectors will continue to be shining lights, and are the perfect addition to the strength of the energy and resources sector. Tourism and education are labour-intensive. Almost one million Australians are employed in our tourism sector, many regionally. And Australia is good at this sector. Apart from our unsurpassed natural beauty, we have great cosmopolitan cities, a fresh, clean and welcoming environment, and phenomenal food and wine. Rodger Powell: Tourism in particular should be front and centre of Government policy. Tourism has a high component of export sales and a high local labour content. Funding for essential tourism infrastructure and for the marketing of Australia should be significantly increased. Queensland and New Zealand have very clearly recognised the importance of tourism as a national economic platform. Australia must do the same. Ian Crooks: Tourism, definitely. The growth of the middle classes in Asia will see more and more visitors coming from China, Korea and India. And the lower Australian dollar will keep more people at home, boosting domestic tourism. As our economy picks up, more people will take holidays. We are already seeing emerging interest in places like Cairns. I believe tourism in FNQ will flourish, and the Gold Coast and Sunshine Coast will pick up. These are still the top tourist destinations in Australia. Owen Barbeler: Although mining investment is widely considered to be at or nearing its peak, the resources sector remains a major component of economic growth. Tourism and property/construction are also important contributors to economic activity, employment and wealth. This is particularly so in Queensland where, in an effort to stimulate these sectors, some incentives have been provided in the state budget for 2013-14. What will have the biggest economic impact in 2013-14 and how? Andrew McEvoy: Growth and growth of Asia. Not just China, but also Malaysia, India and Indonesia. Also the continued strength of the Australian domestic economy, as it affects our growing domestic visitor market. Rodger Powell: The drop in the Australian dollar will help tourism competitiveness. 34 RESORTBROKERS.COM.AU

Labour market productivity must change however, particularly in regards to flexibility and the availability of workers, if tourism is to compete for investment based on performance. A return of the US economy will help Australia due to the impact it will have on Japan and China. Ian Crooks: Again, I would have to say growth in Asia, a lower Australian dollar, and rising confidence when the world’s longest election campaign is over and we can get back to business without the constant cloud of political uncertainty. Owen Barbeler: In the property and tourist accommodation sectors, low interest rates have been very important in stimulating interest in existing property as well as new development. I believe the other key factor is confidence (both consumer and business confidence), which is going to be heavily influenced by government policy at both state and federal levels. How do you see the ‘spend’ versus ‘save’ situation playing out in the year ahead? Andrew McEvoy: Travel has never gone away. We’ve had three years of inbound tourism growth, 18 months of domestic tourism growth and continued outbound growth. For Australians, travel has taken a bigger share of people’s annual expenditure. Rodger Powell: There will not be any shortterm change to the propensity of Australians towards savings. Tourism will continue to have to compete hard with other components of the disposable ‘wallet’. As the US and European economies improve, Australian consumer confidence and spending will follow. Ian Crooks: I think people will be prepared to spend on holidays and leisure. But, otherwise, spending patterns will not change that much. So many people were hurt by the GFC. The lessons run deep. Saving will remain a priority as people are still cautious. Owen Barbeler: Households are spending less and saving more. Pre-GFC household savings were around 4.2% of income, but have been around 10% each year since. A real change to this is only likely after a sustained period of growth in the economy and consumer confidence. However, some upside in spending patterns might be experienced for tourist accommodation in Australia if a weaker $AUD is sustained and more Australians shift their holiday spending home. What are the greatest risks or challenges in the year ahead? Andrew McEvoy: Any major adjustment in China would have an impact. The sector

is also worried about the rising cost of labour affecting their ability to be profitable or, in some cases, remain open during weekends and public holidays. Rodger Powell: Failure by the next Government to address labour market flexibility and productivity issues, failure to reign-in Government spending, and failure to adequately and competitively resource Australia’s tourism marketing efforts in a highly competitive global market place. The best social program that a Government can deliver is good jobs. Ian Crooks: The greatest risk is that the economy doesn’t gain traction and unemployment grows. Also, if wages issues aren’t addressed, we will see people not being employed because it is too expensive, and not viable for business. Tourism businesses are putting staff off because they can’t afford weekend and penalty rates. This is killing off activity and productivity. Owen Barbeler: Apart from ‘external shocks’ (an ever-present risk for the tourism sector), I see government spending and taxation, and its impact on consumer and business confidence, as being a great challenge. A contraction of spending and increased costs to households (as indicated in both the federal and Queensland state budgets) could impact on the propensity for households to spend on discretionary travel. What new business opportunities will present in the year ahead? Andrew McEvoy: Opportunity is endless. It’s picking the right things to invest in that will be the measure of success. Rodger Powell: Continued growth in China, India and the USA, as well as the return of Japan, will provide key inbound growth opportunity if we have the competitive resources to take it. The falling Australian dollar, combined with the satisfaction of pent-up demand, will create new opportunities to stimulate the domestic travel market. Opportunities to renew and replace aging tourism infrastructure, particularly in regional destinations, abound. Government incentives for capital investment in tourism product would assist. Ian Crooks: In our business, the biggest opportunity lies in the availability of new modular construction systems that make hotel and motel development affordable again. I see the biggest growth in the potential for new motels and hotels to be built by developers, and we have a queue of buyers for the resulting businesses

EXCLUSIVE

Photography courtesy of Beautiful Accommodation

Right on the waters edge 3.9 x MULTIPLIER - MOTIVATED VENDOR

The region is experiencing massive growth with the expansion of the coal export facility, natural gas pipeline and new mining developments. The complex is a mix of two and three bedroom apartments, all with en-suite bathrooms to the main bedroom.

Ian Crooks EXCLUSIVE AGENT Mobile: 0411 171 648 Brisbane office: (07) 3878 3999 Email: iancrooks@resortbrokers.com.au

Trudy Crooks EXCLUSIVE AGENT Mobile: 0477 882 210 Brisbane office: (07) 3878 3999 Email: trudycrooks@resortbrokers.com.au

Net Profit: $230,000 Business price: $897,000 Unit price: $625,000 (at valuation) PRICE: $1,522,000

he Coral Cove Apartments is a high rise complex situated right on the water’s edge of Horseshoe Bay.

This is a truly beautiful building set in tropical landscaped gardens in the very popular and sought after region of Bowen in the Whitsundays. The current owners have taken the property from the developer to what it is today - a stunning example of a very easy and profitable lifestyle business with a great profit to match. There is ample scope to increase the letting pool here.

There are a total of 20 in the rental pool, with three of the resort’s sub penthouses and apartments being corporate let with rents of up to $850 per week. The balance of 17 apartments are short term holiday let. All are furnished to a very high standard and boast state of the art appliances and inclusions. • 3.9 x multiplier • $58,686 body corporate salary • Absolute waterfront • Priced competitively for quick sale

With all of the local activity surrounding Bowen, this complex is ideally placed to benefit from the occupancy that flows to it. RESORTBROKERS.COM.AU 35

oliday Lodge Motor Inn has 12 beautifully appointed upstairs and downstairs motel units, as well as a spacious two bedroom, one bathroom residence conveniently opening onto the reception area. The six downstairs units are all self-contained. With the motel’s central location in the heart of the CBD, the pub, club, cafés and restaurants are only metres away. The view from all the motel units is spectacular and the northerly aspect makes for year round warmth. This small motel is without doubt one of the best on the East Coast of Australia. Rarely do we list a motel that ticks all the boxes. This property would be ideal for retirees, new entrants to the motel game or experienced operators who have owned bigger motels and are looking for a lighter workload. There is scope to improve the bottom line by further upgrading this wonderful property.

36 RESORTBROKERS.COM.AU

Stunning freehold motel in the heart of Narooma OUTSTANDING FREEHOLD OPPORTUNITY The Holiday Lodge Motor Inn is frequented by local and international tourists and the many people working in the region. An inspection is highly recommended and will impress a discerning purchaser. • Spacious two bedroom, one bathroom residence • 12 deluxe motel rooms • Large north facing corner block • Walk to cafes and restaurants • Easy to manage property • Highly recommended and ranked #1 on Tripadvisor with raving reviews • Located in one of the most picturesque coastal towns in NSW • After 14 years the vendors are motivated and ready to hand over the reins

Russell Rogers Mobile: 0416 166 909 Sydney office: (02) 9904 8224 Email: russellrogers@resortbrokers.com.au

Net Profit: $132,438 Turnover: $205,980 PRICE: $1,100,000 REF: FH002498

> Continues on page 39 What lies ahead: predictions for out economic future continues... and investments. I stand by the view I’ve often expressed, that we need at least 100 more motels across Australia. Owen Barbeler: Low interest rates, stronger tourism trading conditions, and government support are attracting developers to the accommodation sector. In our business, we have had an increase in clients seeking advice for new hotel and motel developments, which we see continuing over the next 12 months. Trend-spotting: Nominate a key trend you believe will be important in the year ahead - a tip, insight or important market influence? Andrew McEvoy: Back to basics family time. The return to some old-fashioned values and time spent together. It will be good for the domestic leisure market. Rodger Powell: Rapid growth in takeup of smart mobile devices and the willingness of consumers to purchase online will provide great opportunities. Turning Australia into one huge ‘wireless hotspot’ would give us significant competitive advantage in markets where consumers rely on mobile devices (USA, China, Gen X and Gen Y). Ian Crooks: The accommodation industry will rely less and less on the STAR Rating Scheme that has long been the official accreditation system run by Australia’s auto clubs. The vast majority of bookings are now made on line, and guests take notice of the recommendations of other consumers. Many properties self-rate already, ignoring the official scheme, and the trend will be more to describe properties according to location and price – luxury, mid-scale, or economy. Owen Barbeler: For some of Queensland’s leisure tourism destinations, 2012 was the strongest year in five years. We have a state government spending money marketing our tourist destinations, good growth in international visitor numbers (6% increase in international holiday visitors to March 2013), and a lower $AUD. Some major hotel owners in leisure markets are investing in refurbishments (for example, in Gold Coast, Sunshine Coast and North Queensland). If these trends continue over the next 12 months, leisure markets in Queensland might perform more strongly than expected.

37 RESORTBROKERS.COM.AU

Editorial

Reviewing caretaking remuneration BY FRANK HIGGINSON - HYNES LAWYERS Historically there was no real methodology for calculating caretaking remuneration. Caretaking remuneration is often referenced back to a dollar value per lot per annum for comparison purposes. Those amounts range from $600 through to $2,000 per lot per annum (with some buildings more or less than those figures). There are no hard and fast rules. If you are a cynic, you could believe that most caretaking salaries were tied to a value to fit what the developer wanted the body corporate levies to be to allow the sale of the lots into the real estate market at the time the building was first marketed. The ‘market’ might have been looking for no more than $60 per week in body corporate levies. Insurance, body corporate management, sinking fund and some repair and maintenance and the like added up to $40 per week. The nice neat figure of $20 per week is then left over for caretaking, which is $1,040 per lot per annum. Hey presto, you now have that figure locked away for the caretaking remuneration. Many bodies corporate and resident managers still use that figure as a reference point for discussions around caretaking remuneration reviews. Calculating caretaking remuneration by referencing only a dollar value per lot per annum is fundamentally flawed. Each scheme is different. And no two are the same. They all have different physical characteristics. Different common property facilities, different physical area, different gardens and grounds, lifts, pools, plant, trees and shrubs and so on. On top of that they have different legal characteristics, not the least of which are different caretaking agreements. The actual duties under each agreement can be very different, not the least of which is a personal duty (paid for by the resident manager) as against what may be a supervisory one (paid for by the body corporate). Finally there are different committee expectations. Comparing the caretaking remuneration of one scheme to the one beside it purely by a dollar value per lot per annum is nonsensical unless you also compare what is required to be done under the actual caretaking agreement. Otherwise you are more than likely comparing apples and oranges. If people are serious about understanding the cost of providing a caretaking service, what needs to be done is a time and motion study. The duties need to be

broken down and given a time to perform them, and then that time referenced to dollar amounts. Only in that way can you be sure that the remuneration paid under the caretaking agreement is representative of the work required to be performed. Part of that review will be the creation of a schedule of duties that breaks down what the caretaker is required to do on a daily, weekly, monthly and as required basis. The easiest way to avoid disputes is certainty. An obligation to mow the lawns ‘as required’ is open to interpretation. An obligation to mow them weekly during summer and fortnightly during winter isn’t. That certainty also allows you to ascribe a dollar value to those services. Both resident managers and bodies corporate need to consider these things when discussing and negotiating caretaking remuneration. In our experience it is sometimes better to start with a clean slate than use the current caretaking duties as a base document. This is because at the time the agreement was put together, it probably did not cater for what both parties now know the needs of the scheme to be. When the time comes for discussion about caretaking remuneration, a review of the duties (if that has never been done) should be the other side of that same coin. We can guide parties through the process if needed.

My Prediction

FRANK HIGGINSON HYNES LAWYERS Lower interest rates loom, meaning more investors will be chasing verified and repeatable returns. Permanent management rights will continue to transact readily, and a lower AUD should help holiday buildings. All service providers (from resident managers through to their lawyers) need to continue to provide value for money – no one wants to overpay for services. RESORTBROKERS.COM.AU 37

Editorial

Taking Australia to the world BY CATIE LANGDON: IN THIS SERIES OF ARTICLES, WE PROFILE LEADING SHORT-TERM ACCOMMODATION OPERATORS – THEIR ORIGINS, GROWTH, MARKET POSITION, AND FUTURE PLANS.

Park Regis, City Quays, Cairns In the global hotel industry context, StayWell Hospitality Group is something of a rarity. While most of Australia’s major hotel brands are now overseas-owned and operated, StayWell is keeping its feet firmly planted on Aussie soil. StayWell operates two high profile hotel brands – Park Regis and Leisure Inn – under

Park Regis, Kris Kin, Dubai which it is rapidly expanding around the world. The network now numbers more than 30 hotels trading, planned or under development, stretching from Australia to New Zealand, Singapore, China, India, Indonesia, the Middle East, Morocco, and the United Kingdom. The burgeoning group was founded

Editorial

Critical success factors in strata communities TIMOTHY SHEEHAN - SSKB It takes a dedicated individual to take on the enormous role of resident unit manager (RUM). It’s a time consuming responsibility to say the least. Within most buildings you have a collaboration of tourists, owners and renters. Finding a way to cater for the varied needs of each can prove to be quite challenging. The role requires a thorough understanding of management rights, body corporate legislation, finance, letting and leasing, facilities management and human psychology. Add to that a strong grasp of the tourism/real estate industry as a whole and you’re half way there. It takes effective 38 RESORTBROKERS.COM.AU

management strategies and consistency to find an appropriate balance. All too often we see onsite managers bombarded with tasks associated with the job. Being on the front line they’re often considered to be mediators and the Mr Fix-it for everything. The role does vary, yet there is one common certainty; the RUM and their community can benefit from connecting with a strata management company to assist and support in productive community management. One of the critical success factors for a body corporate is the relationship between the RUM, the strata manager and the owners

Park Regis, Singapore just six years ago by career hotelier Simon Wan and lawyer Richard Doyle. Since then, some of Australia’s most significant hotel groups have been bought up by offshore interests – Oaks Hotels and Resorts by Thai conglomerate Minor International, for example, and Constellation (Chifley, Country Comfort) by a Singapore investor.

of the building. The glue that binds both the committee and RUM together is good project management, accountability and reaching milestones. Being specialists in this field, this is where a strata management company can help. Professional strata managers will understand that all stakeholders within a community have an important role to play. Respectful of these roles, they will take it in their stride to ensure communication remains open and clear. Attending meetings, they will promote harmony, overseeing proceedings and working with the committee to build and maintain positive relationships. They will alleviate the sole pressure being on the RUM. By taking on secretarial and treasurer duties, they can ensure invoices are paid quickly and help with financial forecasts and reports. Providing expertise, innovation, education and advice to the community they can prevent small, resolvable issues from escalating. As the industry continues to grow, choosing the right strata managers for your scheme can seem overwhelming. When looking for a high-quality strata management company, you should undertake the same due diligence as you would entering any contract, do lots of research. But ultimately, a partnership is what you’re looking for. Evaluate and compare the services on offer and make sure the company you choose is going to be beneficial to the needs of your community. For example, if a community has an issue with debt collection then it would be wise to

Park Regis, Kuta, Bali “We are one of the very few Australianowned, Australian-based hotel groups with a reasonable international presence,” Mr Wan says with obvious pride. “We’ve been courted by overseas groups, and I can’t deny there are opportunities overseas, but we are committed to staying in Australia.” For StayWell, Australia is more than just home. It is at the core of the Park Regis and Leisure Inn brand identities, and is a point of difference for their products. “Our general managers all over the world are mostly Australian, trained here,” Mr Wan explains. “We implement a lot of Australiafocused policies and work closely with our trade commissions in each country to promote Australian interests and products.” The Australian badge is worn prominently, seen in hotel decor, in the Aboriginal artwork

seek out a strata management company that has proactive steps in place to be able to combat this issue. Beyond being minute takers and invoice issuers, you need a strata management company that will offer advice, strategies and guidance to maintain and enhance your community’s reputation and value. Communication, dispute resolution and quality assurance systems must be of highest priority. By undertaking a good amount of research and focusing on the points above, you will be able to make informed decisions when choosing a strata manager and end up with a proactive and harmonious community with increasing value. For almost 20 years, the team at SSKB has been building and maintaining relationships with key stakeholders with a united mission statement at the forefront of all proceedings, making a positive difference in the lives of lot owners. Between having tertiary qualified staff, experience managing a variety of schemes and a client care support network, we believe in building and maintaining quality working relationships with all clients. The SSKB team is dedicated to finding and implementing unique ways of adding convenience, accessibility and access to more information for their clients For an obligation free meeting we invite you to contact SSKB so we can demonstrate how we can assist with your community. Mark Brady mbrady@sskb. com.au | 0417 706 542. 39 RESORTBROKERS.COM.AU

Piermonde Apartments, Cairns featured on collateral, and on menus where Aussie beers and meat pies take pride of place. Turn on the TV in any StayWell property and the first channel to appear won’t be CNN, it’ll be The Australia Network international service broadcast by our ABC. Park Regis is StayWell’s quality midscale brand, while the Leisure Inn brand is its economy product. Both, Mr Wan says, deliver value-for-money accommodation in prime locations, with exceptional comfort, modern facilities, and welcoming service. The company boasts a diversified income base via a range of operational models including management fees, management rights and leasehold and asset ownership. With strategic partners, StayWell owns 14 hotels within its current network, investing a significant amount of capital into the business. Mr Wan’s stewardship is informed by a stellar hotel career. Before starting StayWell, he was five years CEO of ASX-listed company THL, which had a 530-strong worldwide hotel network. Previous roles included managing director of the Park Plaza Hotel Group for Asia Pacific, and CEO for Northern Asia of Accor, based in Beijing. Internationally, it is no surprise China and India are StayWell expansion priorities. “These are markets where it is easier to get traction, and that’s simply a reflection of their growth,” Mr Wan said. “Their hotel industries are not mature, so there are many more opportunities and they want international assistance, especially in service industries.” StayWell’s 2013 hotel opening schedule is impressive. It debuted in Indonesia in May with Park Regis Kuta, and will launch in India this month with the Leisure Inn Grand Chanakya in Jaipur, to be followed by Leisure Inn Thane in Mumbai and Park Regis Goa. StayWell is also making its mark in mature hotel markets. The 272-room Park Regis Birmingham will open in the UK next year. “Establishing a beachhead is the hardest step in expanding to another country,” said Mr Wan. “Once you have that, you can build brand awareness and customer knowledge. It is also critical to find the right people. Now that we have these in place, we have a great platform for further expansion in the UK and Europe.” StayWell has opened a London office and signed its first London hotel management agreement. Globally, Kuala Lumpur and Qatar are also on the radar. Back at StayWell HQ in Sydney, Simon Wan is

Park Regis, City Centre, Sydney also eager to build on the 14-strong network of Park Regis and Leisure Inn properties in Australia (Sydney, Blue Mountains, Hunter Valley, Melbourne, Brisbane, Cairns, Townsville, Hobart and Launceston). “We’re keen to plug the gaps,” he says, referring in particular to Perth, Darwin and Adelaide. It’s a market he knows intimately, having come to Australia with Hyatt in 1981 for a one-year training stint. “It’s been a long year,” he laughs. “I’m still here.” His love of the Australian way of life is one reason StayWell remains committed to staying put. “We love the Australian lifestyle, and we are very aware of the advantage it gives our people in terms of work-life balance. We have 30 people in our Sydney headquarters and over 150 Australia-wide.” But there are challenges. “It is expensive to do business in Australia,” he readily admits. “We really value people’s family and leisure time, but penalty rates are a big issue. “Hospitality, unfortunately, is a 24-7 business. We are never closed. Australia’s very expensive workplace structures are an impediment to growth. We really need to tackle this while somehow getting the balance right.” Two other matters, he says, are critical to the future of Australia’s tourism industry – the changing customer profile, and the need for new infrastructure development. “There is no question we are seeing a huge shift in the market, with our major business now to come from China, India and the Middle East,” Mr Wan says. “Industry operators need to be in touch with that changing dynamic. “Also, there have been no new attractions developed for so long. We are still relying on the Opera House and the Great Barrier Reef. If we look at destinations that spend a lot of money on their airports and new attractions – Dubai and Singapore, for example – their inbound visitor numbers are up and ours are not. We can learn something from them.” We could do worse that heed the advice of Simon Wan. Afterall, he started StayWell in 2007 with three hotels in Tasmania, just as the GFC was about to unfold. “Great timing,” he laughs. “But we survived, we are here, we are passionate about what we do, and we are growing.” For more information, visit www. staywellgroup.com RESORTBROKERS.COM.AU 39

Editorial

THE MANY FACES OF THE ACCOMMODATION INDUSTRY

Paul Constantinou:

Leader, innovator & all-round good guy ALEXANDER COOK - RESORT BROKERS AUSTRALIA For this edition’s contribution to this ongoing series of articles, I had the pleasure of catching up with Paul Constantinou. For those that haven’t come across his name, Paul is the founder and chairman of Quest Serviced Apartments, Australia’s largest corporate accommodation provider and also one of Australia’s most successful franchise models. The origins of Paul’s drive to run his own successful business can be traced back to his youth. Born and bred in the Melbourne suburb of Williamstown, he was conscious of his parent’s business endeavors from an early age. ‘My family was always involved in running small businesses and shops. I appreciated from early on that this brought good times and bad…the dinner table at the end of the week would always tell you what sort of week it had been’. Paul firmly believes that the need to run his own business was pre-determined in his DNA. His passion for the hospitality sector can be seen in the education decisions he made as a young man. Shortly after leaving school, Paul enrolled in a Catering and Hotel Management course. During the day, he would attend classes at Footscray Institute to concentrate on finance, accounting and the more business orientated aspects of the hospitality. By night, he would slip on his chef’s whites and attend more vocational and practical based classes at the William Angliss Institute. Paul sites the diversity of his learning and experience as having an incredibly positive and lasting effect of his career. As part of his course, Paul was required to spend a year gaining experience in an established business. To this end, he found himself at 40 RESORTBROKERS.COM.AU

the Mildurra Inlander. Spending time in the kitchen, in housekeeping and on reception, he began to gain a more global view of what makes a successful business tick. Interestingly, the ethos that underlies Quest’s philosophy today can be traced back to this formative year spent in Mildurra. ‘By working in all areas of the business, and interacting customers on all levels, I quickly gained an understanding of their true needs. In actual fact, it wasn’t necessarily the property itself, but the relationships with the customers that was of paramount importance. I learnt then, and still believe today, that the best businesses are those that have great interaction with their clients’. After graduating in 1976, Paul started working in a managerial position for The Inlander Group, first running a motel in Shepperton, later overseeing the management of 3 motels in Aubury. Looking to improve his back office experience, particularly from a finance and accountancy perspective, Paul soon moved back to Melbourne for a stint with Commodore Hotels. In 1979, having solidified his understanding of the basics, and having gained a thirst for ‘doing it on his own’, Paul took his first foray into owner-operation by purchasing The Glass House in Collingswood, and later another one in Brighton. After a successful and eventful 4 years of running hotels, a change in family life dictated the next turn in Paul’s career. ‘When our first child came along, I wanted to get away from long hours involved with operating hotels.’ Taking the expertise he had acquired in a new direction, he returned to Melbourne

once again in the mid-80’s and opened a restaurant called ‘Paul’s Cellar House’. In what would soon form a fundamental tenet of the Quest model, Paul chose to focus on the corporate market. By targeting the numerous businesses in the area, he was able to establish a successful business reliant largely on ‘the corporate luncher’. In 1988, Paul established the first Quest property at Royal Gardens in Fitzroy. Few, if any, would have imagined at the time the fascinating journey that this brand would take over the next 25 years. The plan for Royal Gardens was the same as it is for all Quest properties today; to provide quality accommodation for the extended stay corporate traveller. The difficulty with Royal Gardens was the positioning; off-road, with no signage opportunity. As such, Paul had to go in search of his clientele. Once local businesses representatives visited the property, it sold itself. No one else was able to offer rooms set-up specifically with ‘the corporate warrior’ in mind. This importance of pro-actively sourcing business from your local market is something that Quest franchises still preach today. As Paul established additional Quest properties to the portfolio over the coming years, the opportunity presented by effective franchising became increasingly apparent. Initially, this was driven by a shortage of suitably skilled individuals. ‘I was never keen on starting a management company. The scope for growth is invariably limited by the amount and quality people you able to find’. By opening up the Quest brand to motivated individuals looking to drive their own destiny, the pool of people they drawing from improved dramatically. Moreover, as more Quest properties became franchised, trading performance clearly showed that those with ‘skin in the game’ outperformed those under employment. Paul readily admits that the Quest business that we know and love today was built on trial and error. It has taken 25 years of honed and improved systems and processes to create the product they have to offer, as well as the opportunity presented to franchisees. As preferred agents to Quest franchises across Australia, we have been fortunate enough to bear witness to the power of the brand and what it can offer its franchisees. I asked Paul what he was most proud of since he started Quest a quarter of a century ago. His answer is telling and symptomatic of this industry leader. ‘What excites me each day is the ability that the Quest Brand has to help young people succeed. When I was looking to get into business as a young man, it was so difficult. It was easy to get disillusioned. The Quest brand has the power to assist and grow; it can help people achieve their goals in life they might not have thought possible. To have a created a framework for that to happen makes me very proud’.

13 year old Big 4 caravan park OUTSTANDING HOLIDAY PARK IN NORTH QLD Ian Crooks EXCLUSIVE AGENT Mobile: 0411 171 648 Brisbane office: (07) 3878 3999 Email: iancrooks@resortbrokers.com.au

Trudy Crooks EXCLUSIVE AGENT Mobile: 0477 882 210 Brisbane office: (07) 3878 3999 Email: trudycrooks@resortbrokers.com.au

Net Profit: $435,000 Turnover: $830,000 PRICE: $3,650,000 REF: FH002549

he Aussie Outback Oasis Cabin and Van Village is still a work in progress. The owners have worked tirelessly to improve this property. The most recent addition has been a free form resort swimming pool and associated landscaping and amenities costing in excess of $100,000. The park presents in excellent condition with concrete roads, annex slabs, and 20 ensuite cabins and villas. Occupancy is the highest in the town, with a solid client base of regulars and travellers alike. The owners offer camp oven meals and pizza nights during the season, and there is a new alfresco coffee deck as well.

The resort also has a strong following from country visitors who have children in boarding schools in Charters Towers. The park offers new owners a spacious three bedroom home with large entertaining deck and open plan living. This business has experienced growth in excess of 15% each year, and continues to grow further • 66 powered sites, 20 unpowered sites • 20 ensuited cabins and villas • Several undercover BBQ areas • Two very large camp kitchens, including fire pit and pizza oven • Brand new resort pool • Two amenities blocks with new washing machines • Jumping pillow • Large 3 bedroom residence • Massive shedding and extensive P.E. inventory • 3 acres undeveloped land • Wi-Fi installed through park

With over 10 acres of land and 3 acres still to develop, this property offers new owners a great future. RESORTBROKERS.COM.AU 41

Editorial

Management rights & leasebacks: valuation, risk & demand TIMOTHY SHEEHAN - SSKB

Last month I broached the subject of NRAS in the context of management rights. To my surprise (no, really) many of the parties who chose to provide feedback on the article simply failed to grasp the concept. The banks seem to have a wildly divergent view of the situation although discussions would suggest that some of the lenders policy makers need to have a cup of tea and a good lie down ! Like many new ideas I suspect that over time the NRAS model will find its place in the management rights landscape and in a year or two will hardly rate a mention. You may recall in my last article that I mentioned the concept of certainty and value. Essentially the argument goes that the more certain a financial outcome, the more valuable the asset driving that outcome. This is a credo that I’ve long adhered to and it’s certainly the way in which valuers look at assets such as management rights. This month I’m going to take a stab at reviewing leasebacks in the context of value and certainty. First a quick refresher. A leaseback arrangement is simply a business model whereby the resident manager leases a lot from an owner for an agreed time and under agreed terms. The resident manager is essentially backing himself to make more on the lease cost to rental income margin than could otherwise be made on standard letting commission and fees. There can be numerous motives for a resident manager to offer a lot owner such an arrangement. Some of these motives are fundamentally flawed while others make good commercial sense. On the negative side offering a 42 RESORTBROKERS.COM.AU

rental guarantee or leaseback in a holiday complex is, to me, fraught with danger. The lot owner might be motivated to enter into such an arrangement but it will only be because the rental returns are not meeting expectations. Offering a leaseback simply to keep a unit in a letting pool makes no sense to me at all. In essence all the resident manager has achieved in this example is to shift the cash flow risk from the lot owner to himself. Given the cyclical nature of the holiday accommodation sector this strategy simply fails the certainty and value test. Similarly, for permanent complexes I believe that any leaseback arrangement is unlikely to drive higher net revenues than a standard letting appointment and again the cash flow risk is shifted to the resident manager. So, we are left with the orphaned child of management rights and hotels, the strata titled, short stay serviced apartment. Also known as corporate short stay these management rights businesses have thrived in the past 5 years and show little sign of slowing down any time soon. Typically based in CBD and CBD fringe areas of capital cities and high population regional centres short stay serviced apartment based corporate buildings are the natural competitor to the more traditional hotel room. In these buildings there is, in my view, a compelling argument for the leaseback model. When you are providing accommodation services to large national and multi-national companies certainty of supply and presentation is critical. It’s simply not good enough to have apartment availability and consistency

of presentation impacted by the whims and budget of a multitude of individual owners. In this business model certainty is essential and a key driver of the business value. The solution is simple. Offer a reasonable permanent rental based leaseback income for the lot owner and take over responsibility for presentation, refurbishment and letting. The model is not without its challenges. There remains an underlying monthly obligation to lot owners that the lease payments will be met regardless of the actual performance of the building. As such there is no doubt that letting risk has shifted from the lot owner to the operator. It’s all about the model. Given lack of supply and new product in the hotel sector what is the risk of serviced apartment demand falling substantially over the midterm ? To me the greater risk is not having control of the apartments in such a building and losing valuable corporate clients as a result. The greater risk to operators is in situations where not all the apartments in such a building are on leasebacks. To me this creates a potential conflict of interest as there is a clear financial incentive for an operator to push bookings toward leaseback apartments. This dynamic needs to be carefully managed although in my view the better model is simply all leasebacks or none at all. All this leads me headlong into the crux of this article. What to do with valuations when leasebacks are involved in a management rights sale? First, it’s essential to get the P and L for sale purpose right. By this I mean clearly showing the normalised and leaseback income streams as separate items within the profit and loss. The process is one of taking the P and L and arriving at essentially two Profit and Loss Statements. One reflects a “what if” situation assuming the building is being run as a standard management rights with no leasebacks. The second P and L looks at the additional income derived as a result of the leaseback model. Typically a valuer will place an industry standard multiple on the normalised profit and a discounted multiple on the leaseback profit. It’s the multiple on the leaseback profit that often causes some angst. Here’s the thing. If certainty = value and a short stay corporate management rights relies upon certainty of supply and consistency of product than I would argue that the leaseback model provides certainty. Yes, there remains a risk in respect of the rent needing to be paid to the lot owners every month but I would argue that this risk is mitigated by the ongoing demand for short stay serviced apartments. I would also argue that these types of businesses are not for the first timer and should only be taken on by experienced operators preferably with a background in hotel management and in

particular real time tariff management. I’m not a valuer so far be it from me to venture a thought on an appropriate multiple for leaseback profits. However, I think we could do worse than start by looking at yields on motel leases and some of established leaseback models such as the highly regarded Quest serviced apartment business. On a final note a challenge for the valuers in our industry. Over time I’ve seen a number of management rights contracts reflecting agreed multiples on leaseback income that ended up being above the number attributed by the bank instructed valuer. In most cases the contracts have been renegotiated to reflect the valuation. At what point would the valuation profession take note of such a trend and determine that the valuation outcomes were driving the market rather than interpreting the market. You can see why I’m not a valuer. Ask the hard questions but have no answer ! I should have been a journalist.

My Prediction

MIKE PHIPPS MIKE PHIPPS FINANCE • Continued mayhem in the Eurozone with very subdued economic performance • Reserve Bank strategies for keeping the Aussie Dollar under control may fail due to our economy being seen as a safe haven for investors • Holden will announce that they will cease manufacturing in Oz • US economy will continue slow but sustained recovery. May assist in bringing Aussie $ back somewhat • Consumer confidence will remain subdued although the change of government will help • Reserve Bank will drop cash rate to 2% via 3 more .25% rate cuts. May even go a full .5% in one hit before Xmas. • Inflation will remain within the RBA acceptable range although unemployment unlikely to improve. • China demand will continue to be the single biggest influence on our economy with that demand set to slow somewhat • Resource sector prospects and outcomes may improve if Liberal Government sort out mining and carbon tax debacles • Demand for quality low risk businesses such as motels and management rights will continue to improve as people look to either buy a job or control their own destinies. 43 RESORTBROKERS.COM.AU

Editorial

Terms of contract: Subject to finance DAVID BURROUGH - HILLHOUSE BURROUGH It is not uncommon that an agreement for the purchase of a motel contains a “Subject to Finance” clause. We continue our examination of the core terms of the motel purchase contract with a look at this condition. Where an agreement for the purchase of a motel is contingent on finance approval a comprehensive and clear finance approval clause is critical. Ordinarily a finance clause will allow the purchaser a certain time within which to obtain satisfactory finance. The approval date is usually 28 days from the contract date. Purchasers should check with their proposed financier that they will be able to consider their application and issue an unconditional approval letter within this time frame. This is particularly important over holiday periods such as Christmas. It is important that the finance clause clearly stipulate that finance must be obtained on terms satisfactory to the purchaser. This protects the purchaser where finance may be approved subject to onerous and unreasonable conditions. A well drafted clause goes further to oblige the purchaser to notify approval, rejection or waiver to the vendor in writing within a specified time frame usually within two business days of the finance approval date. Failing notification of approval, rejection or waiver by the purchaser within the specified time, some clauses deem finance approved. Alternatively a clause may provide for termination by the vendor. A purchaser should take care to ensure they are aware of the particular wording of their clause. Most finance clauses provide that the finance rejection can not attributable to the purchasers own default and create a positive obligation upon the purchaser to seek out the approval. This affords the

vendor some degree of protection as the purchaser can not use finance approval as a scapegoat to avoid performance of his or her obligations pursuant to the contract. It is critical that a finance clause is drafted with caution as the courts have found a number of finance clauses void for uncertainty for various reasons. As a result a clear and comprehensive finance clause is beneficial for purchaser and vendor alike. Accordingly we recommend you consult your legal advisor and consider the contents and terms of the finance before entering into an agreement.

My Prediction

DAVID BURROUGH HILLHOUSE BURROUGH McKEOWN With interest rates at historic lows and the Australian dollar coming down off its historic highs prospects for growth in the tourism sector for the coming year appear excellent. In the broader economy the gradual improvement should continue for the coming year and should be enhanced by pre-election uncertainty finally being out of the way. Overall a better year in prospect. All the best for the coming financial year.

RESORTBROKERS.COM.AU 43

David Janett - South West Brisbane Our agents pride themselves on their local knowledge. They each look after a geographical patch, and grow to learn it intimately. We feel this adds greatly to the confidence with which a property can be sold. In this new feature we will get some thoughts on their local area and will also learn a bit about their personalities. Tell us about your area My area is the Southern and Western suburbs of Brisbane, compared to some of my colleagues, the area is quite small and a short drive from our office in West End. Your thoughts on your area The area I cover is very popular with the asian community and is part of the growth corridor leading from Logan to the city. What drives business in your area? The councils of Logan and Brisbane are actively promoting residential infill. There are also several universities etc. which cater for International students. There are several industrial and technology parks. The demand for Management Rights in this area is very solid. 44 RESORTBROKERS.COM.AU

What did you do before Resort Brokers? I started as an electrician, then branched into retailing with a Retravision store. We moved to Brisbane from New Zealand when my wife got a job over here, she said “pack ya bags were off!” Upon, arriving in Brisbane, we purchased a Management Rights which provided the perfect business; great income, flexible hours and the banks love these business as well. How did you end up at Resort Brokers? After seven years of permanent management rights and having survived the mini tornado that struck The Gap. I sold the business through Neville Littleton and Resort Brokers. As I had sold residential properties inside my complex it seemed a natural progression to sell Management Rights and being passionate about the

industry I didn’t want to lose contact with it. I was so impressed with Resort Brokers that I decided to join them. What do you do in your spare time? I enjoy cycling but having had two recent crashes my wife thinks I’m mad. I enjoy jet skiing up at Somerset Dam and snow ski as well. I do a bit of mountain biking as well. I love car and motor bike racing and recently bought a Prado for a bit of off-roading. Do you have a nickname? I have been called “Dave the Rave” which I can understand after a couple of beers but I’m mainly known as D.J. What annoys you? Traffic, now that I drive around the city. It is a big change from rural NZ to inner city Brisbane.

UNDER OFFER

Accommodation business in the centre of Melbourne CBD WHEN POSITION COUNTS Jim Chapman EXCLUSIVE AGENT Mobile: 0413 444 782 Melbourne office: (03) 9347 3100 Email: jimchapman@resortbrokers.com.au

Net Profit: $759,429 Turnover: $2,637,000 (expected) PRICE: $2,860,000 REF: LH002572

his Quest business is in an outstanding position in Melbourne CBD within walking distance to city boutique shopping, David Jones, Myer, theatres, cinemas, various Corporate headquarters and many tourist and sporting facilities. It consists of 55 studio, one and two bedroom serviced apartments. The guest facilities include ground floor reception/ office area, corporate “Q” business lounge, 600 Channel IPTV system, guest laundry, gymnasium, board/meeting room, internet access and Foxtel. All apartments are spacious with high ceilings, tasteful furnishings, renovated bathrooms, full kitchens (kitchenettes in studio apartments) and large lounge/ dining areas.

During 2011 and 2012 the vendor completed a substantial refurbishment program including painting, carpeting, bathroom renovations, new corporate “Q” lounge (inclusive of fit-out with 55inch LCD TV, dining tables, lounge area and 1 x breakfast servery, 1 x Apple Mac 22inch computer and HP Laserjet Printer) and first hotel/serviced apartment property in Australia to have 600 channel IPTV system interactive installed (targeted to extended stay guests from India and China). The expenditure on the refurbishment has been in excess of $500,000. The business continues to expand with current occupancy exceeding 80% ensuring substantial incomes and profitability. • Quest Serviced Apartment franchise. Excellent mix of corporate and leisure guests • The central city building was converted to serviced apartments in 1997/98 and has operated as a Quest business from 2008. • Long secure lease tenure • Market rent

RESORTBROKERS.COM.AU 45

Relief managers DIRECTORY We have many more relief managers in our directory. Please contact us if you require a full list. Please note that this is a directory only. Resort Brokers Australia do not interview or qualify any of the managerâ&#x20AC;&#x2122;s below. Name: Delwyn and John Gane Mobile: 0421 987 462 Email: N/A Manager type: Motel Location: SE Qld / Central Qld

Name: Ray and Bev Hearn Mobile: 0429 420 826 Email: management@yourpark.com.au Manager type: Caravan Park Location: South Qld / Nth NSW

Name: Llew and Trisha Pointon Mobile: 0400 035 359 Email: llewp@tpg.com.au Manager type: Motel Location: Nationwide

Name: Steve and Pam McMullen Mobile: 0418 497 214 Email: sgpj.mcmullen@bigpond.com Manager type: Motel Location: Nth / Coastal NSW

Name: Graeme Fillipe and Deborah Wallace Mobile: 0427 512 751 Email: graemedeb@motelmanagers.com.au Manager type: Motel Location: South Qld / Nth NSW

Name: Simon and Anne Frost Mobile: 0433 921 029 Email: simon@serviceplease.com.au Manager type: Motel Location: Nationwide

Name: Phillip and Sharyn Stallman Mobile: 0428 931 589 Email: pjstal@bigpond.com Manager type: Motels, MR & CP Location: Nationwide

Name: Bob and Judy Sheppard Mobile: 0419 784 215 Email: bj.sheppard8@bigpond.com Manager type: N/A Location: NSW

Name: Sue and Hubert Rietberg Mobile: 0418 883 233 Email: sueandhugh@iinet.net.au Manager type: All properties Location: Brisbane / Sunshine & Gold Coast

Name: Lyne and Wayne Foster Mobile: 0437 217 621 Email: waynefos@dodo.com.au Manager type: Motels Location: Nth / Nth East NSW

Name: Chris and Carmel Moloney Mobile: 0400 483 291 Email: ccmoloney-315@hotmail.com Manager type: Motels Location: Nationwide & N.Z.

Name: Michael Hunter Mobile: 0439 950 900 Email: N/A Manager type: Motel Location: Qld

Name: Carol and Harry Turnbull Mobile: 0428 399 733 Email: N/A Manager type: N/A Location: Nationwide

Name: Peter and Julie Johnston Mobile: 0409 218 751 Email: N/A Manager type: Motel / MR Location: Qld

Name: Robyn and William Campbell Mobile: 0409 838 856 Email: rgcampbell@hotmail.com Manager type: N/A Location: Nationwide

Name: Louise and Siggy Dannell Mobile: 0408 901 927 Email: lsdannell@bigpond.com Manager type: All Location: East SA

Name: Paige Renshaw Mobile: 0438 847 941 Email: paigeandrea@hotmail.com Manager type: Management Rights Location: Nationwide

Name: Karla Harding Mobile: 0414 767 499 Email: bnbangel@fastmail.net Manager type: B&B / Guesthouses Location: Nationwide

Name: Sylvia and Gilbert De Michiel Mobile: 0419 204 773 Email: sylvia@anzacs.net Manager type: N/A Location: East Vic / Qld / NSW

Name: Gary and Robyn Loakes Mobile: 0408 798 352 Email: grl21@bigpond.com Manager type: All Location: Nationwide

Name: Scott Walters Mobile: 0488 726 888 Email: dougie.71@hotmail.com Manager type: Management Rights Location: Nationwide

Name: Tony and Dawn Davies Mobile: 0412 065 348 Email: dawn.tony@hotmail.com Manager type: Hotel / Motel / CP Location: West Qld

Name: Anastasia and Gus Johnson Mobile: 0408 021 303 Email: anastasiajohnson@bigpond.com Manager type: Resort Location: SE / NE Qld

Name: Jan and Allen Morton Mobile: 0417 529 129 Email: N/A Manager type: N/A Location: Sunshine Coast

Name: Christopher Hillman Mobile: 0488 550 005 Email: christopher.hillman@bigpond.com Manager type: Motels, MR, Resorts Location: Nationwide - Capital Cities

Name: Paul and Arlene Moore Mobile: 0404 855 711 Email: pfandammoore@live.com Manager type: Hotel / Motel / CP Location: Qld & NSW Name: Greg and Linda McWhirter Mobile: 0409 882 803 Email: thamacz@octa4.com.au Manager type: Motels Location: Nationwide

Name: David and Belinda Gustafson Mobile: 0403 219 562 Email: gustafsondavid@hotmail.com Manager type: N/A Location: NSW / Qld

Name: Elisabeth Grimm Mobile: 0414 751 142 Email: yellowroses4me2222@yahoo.com.au Manager type: Management Rights Location: Gold Coast 46 RESORTBROKERS.COM.AU

Name: Sabrina Simmonite Mobile: 0410 926 221 Email: qldreliefmanagers@bigpond.com Manager type: Management Rights Location: Brisbane, Sunshine & Gold Coast

Industry Specialists a 100 95

[

100

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RESORT MANAGEMENT ADVISORS

25 95

SPECIALISTS IN:

Review of operations | Pre-opening planning 5 75 Owner representation | Operations management 0

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

Expert management rights lawyers

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

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Industrial

Child Care Centres

Commercial & Retail

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 (07) 5474 8955  Taxation 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

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 - 7,500 - mailed hard copies and 15,350 - 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

Associate Director

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

> Bachelor of Business Management (Real Estate and Development), University of

RESORTBROKERS.COM.AU 47

Exclusive Listings You won’t see these fantastic properties anywhere else! PROPERTY TYPE

LOCATION

UNITS

Motel Investment in Popular South Coast Town (NSW)

INV Motel

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Temp

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New 30 year lease, showing 35% return in Hunter Valley

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Only 60 minutes from Sydney! Great opportunity, new lease

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Perm

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Freehold motel - 17.92% return

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Large Investment Motel in Greater Brisbane Precinct 9.62 % ROI

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Inner City Brisbane Permanent

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Brisbane’s Hottest Inner City Management Rights $610,696 nett

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EOI

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Priced to sell - Motivated Vendor Perfect First Timers 3.5 Star Motel opposite Tweed River Two New Management Rights Businesses for the Price of One Leasehold in heart of Darwin showing massive 60% ROI!

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Iconic Freehold Hotel - The Lions Dens Hotel

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$96,155

$132,500

Busy country & western QLD Holiday Park - Freehold offering - Perfect for a family

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Roma

Temp

$562,118

$3,600,000

Management Rights

Mandurah

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$402,549

$1,695,000

The Best in the West

48 RESORTBROKERS.COM.AU

Recently Sold Resort Brokers Australia has sold and settled 60 properties since the 15th January 2013. We have a further 67 properties under contract

INVESTMENT MOTEL COWRA, NSW

MANAGEMENT RIGHTS PELICAN WATERS, QLD

LEASEHOLD MOTEL TOWNSVILLE, QLD

LEASEHOLD MOTEL ROSSLEA, QLD

FREEHOLD BACKPACKERS PORT MACQUARIE, NSW

INVESTMENT MOTEL WARRUGAL, VIC

LEASEHOLD MOTEL MANAGEMENT RIGHTS CLONCURRY, GYMPIEQLD

MANAGEMENT MANAGEMENTRIGHTS RIGHTS NOOSA, QLD GYMPIE

MANAGEMENT RIGHTS SPRING HILL, QLD

LEASEHOLD MOTEL WANTIRNA,QLD

MANAGEMENT RIGHTS JINDABYNE, NSW

LEASEHOLD MOTEL MELBOURNE, VIC

LEASEHOLD MOTEL GLADSTONE, QLD

LEASEHOLD MOTEL CARDWELL, QLD

LEASEHOLD MOTEL WOLLONGONG, NSW

MANAGEMENT RIGHTS MACKAY, QLD

MANAGEMENT RIGHTS BRISBANE, QLD

MANAGEMENT RIGHTS CALAMVALE, QLD

MANAGEMENT RIGHTS BEENLEIGH, QLD

LEASEHOLD MOTEL NANANGO, QLD

RESORTBROKERS.COM.AU 49

Our team Ian Crooks

David Janett

BROKER SOUTH & WEST BRISBANE

Carolyn Griffith

Glenn Millar

Trudy Crooks

Tim Crooks

Steve Campbell

MANAGING DIRECTOR NATIONWIDE

SALES MANAGER / BROKER NATIONWIDE

BROKER CBD & SOUTH BRISBANE

BROKER BRISBANE CBD & SURROUNDS

Tyler Millar

Lindsay Cooper

Ian Dore

Neville Littleton

BROKER SUNSHINE COAST

BROKER WEST QLD & NTH NSW

BROKER NTH. NSW & GOLD COAST

BROKER BRISBANE NORTH

BROKER CENTRAL GOLD COAST

BROKER SOUTHERN GOLD COAST

Andrew McQualter

Alex Cook

Lynn Booth BROKER CENTRAL QLD

BROKER CENTRAL QLD

Len Booth

Shane Mullins

James Carrick

Russell Rogers

Shane Wynhoven

Jim Chapman

Stuart Charles

Gerard Hurry

BROKER MID NORTH COAST & NORTH WEST, NSW

Brooke Kelly

RECEPTION / OFFICE ADMINISTRATION

50 RESORTBROKERS.COM.AU

BROKER SOUTH COAST, NSW

Julie Davidson

NATIONAL TEAM MANAGER

BROKER GOLD COAST

BROKER SYDNEY CBD, NSW

Sarah Wilkinson

OFFICE ADMINISTRATOR

BROKER NORTH EAST, VIC

Emma Krause

ACCOUNTS MANAGER

BROKER WEST, VIC

Dianne Atkinson

FINANCIAL CONTROLLER

BROKER FAR NORTH QLD

BROKER NORTH WEST, VIC

Carla Cook

MARKETING MANAGER

Directory QUEENSLAND BRISBANE - HEAD OFFICE Telephone: Facsimile: Email: sales@resortbrokers.com.au

07 3878 3999 07 3878 1199

FAR NORTH QUEENSLAND Motels / Pubs / Caravan Parks / Management Rights Shane Mullins 0447 185 001

NORTHERN TERRITORY

362 Montague Road, West End Qld 4101

Motels / Pubs / Caravan Parks / Management Rights Chris Rowe 0408 225 220

PO Box 5004, West End Qld 4101

NEW SOUTH WALES

NATIONWIDE Ian Crooks - Managing Director Trudy Crooks - Sales Manager CBD & SOUTH BRISBANE Management Rights Tim Crooks NORTH BRISBANE Management Rights Neville Littleton CBD & BRISBANE Motels/ Management Rights Steve Campbell SOUTH WEST BRISBANE Management Rights David Janett

0411 171 648 0477 882 210

Telephone: Facsimile: PO Box 78, Freshwater NSW 2069

0422 208 450

NORTHERN NSW Motels/ Management Rights Ian Dore - Northern NSW

0412 752 238

0407 727 194

CENTRAL/ NORTH WEST NSW Caravan Parks / Pubs/ Motels Lindsay Cooper

0418 711 047

0407 220 668

SYDNEY CBD & GREATER SYDNEY & CENTRAL NSW Motels/ Backpackers / Management Rights Shane Wynhoven 0424 174 592

0404 204 672

MID NORTH COAST / NORTH WEST, NSW Motels/ Caravan Parks James Carrick

0400 664 065

SOUTH COAST, NSW Motels/ Caravan Parks Russell Rogers

0416 166 909

CENTRAL WEST/ SOUTH WEST/ SOUTH EAST QLD Caravan Parks / Pubs/ Motels Lindsay Cooper 0418 711 047 GOLD COAST Telephone: Facsimile:

07 5510 3900 07 5510 3111

MAIN BEACH Motels/ Management Rights Ian Dore

0412 752 238

NORTH GOLD COAST/ SURFERS PARADISE Management Rights Alex Cook 0467 600 610 SOUTHERN GOLD COAST Management Rights Andrew McQualter

0431 513 532

CENTRAL GOLD COAST Management Rights Carolyn Griffith 0419 675 429 SUNSHINE COAST / DISCOVERY COAST / HERVEY BAY Management Rights Glenn Millar 0412 277 804 Tyler Millar 0411 271 761

02 9904 8224 02 9904 8867

VICTORIA Telephone: 03 9347 3100 Facsimile: 03 9347 3111 PO Box 1100, Carlton VIC 3053 NORTH EAST VIC Motels/ Caravan Parks/ Management Rights Jim Chapman 0413 444 782 WEST VIC Motels/ Caravan Parks Stuart Charles

0458 588 472

NORTH WEST VIC Motels/ Caravan Parks Gerard Hurry

0417 250 211

TASMANIA Motels/ Caravan Parks Jim Chapman

0413 444 782

CENTRAL QUEENSLAND A/h: 07 4155 6330 Facsimile: 07 4155 6440 Motels Len Booth

0438 139 422 RESORTBROKERS.COM.AU 51

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