04 Aug 2022
Words Lisa Allen The Australian
Rights are reigning supreme
The little known Alloggio has enhanced its position as one of Australia’s largest short-term rental accommodation (STRA) managers through the acquisition of Great Ocean Road Holidays, multiple Noosa acquisitions, Magnetic Island’s top holiday provider Best of Magnetic, Prestige Holiday Homes in Coolum, First National Magnetic Holiday Rent Roll and The Edge Holiday Rent Roll at Coffs Harbour.
The company also gained its own channel manager with the addition of Australian-owned accommodation platform Aabode.com to its portfolio, linking it with key travel retailers and tapping into the Asia and Pacific markets for the first time.
Alloggio founder and chief executive Will Creedon said the acquisitions had bolstered their portfolio to more than 1950 holiday properties on Australia’s eastern seaboard.
“The past six months has seen Alloggio very active in pursuing its planned acquisitions-led growth strategy, utilising our strong cash position following the November 2021 IPO and the positive rebound in domestic travel,” Mr Creedon said in a statement.
“We look forward to leveraging our current platform to make further strategic acquisitions, implement organic growth initiatives and extract operational efficiencies for the remainder of 2022 and beyond,” he said.
In December 2021, Alloggio announced the acquisition of the entire issued share capital in Great Ocean Road Accommodation Centre, Victoria for $8m.
The acquisition expanded Alloggio’s physical presence by providing a new hub in the Great Ocean Road region and included four offices managing holiday properties in Torquay, Anglesea, Lorne, Apollo Bay, Fairhaven and Wye River.
Further north, Alloggio executed a binding agreement in January to acquire holiday property management business Accom Noosa and the management rights to Fairshore and Noosa International Resort for $4.5m, making Alloggio the destination’s largest holiday management business.
The company’s expansion along Australia’s eastern seaboard also included 160 property managements via the acquisition of Best of Magnetic, 37 luxury holiday homes with the June purchase of the Coolum-based Prestige Holiday Homes management business, 44 property managements from First National Magnetic Holiday Rent Roll and a further 28 properties following the acquisition of The Edge Holiday Rent Roll, Coffs Harbour.
Launched in 2015, Alloggio’s portfolio of properties are located in popular tourism destinations which continue to enjoy strong demand for travel, including Queensland’s Magnetic Island, Noosa, and Coolum. In NSW there is strong demand in Coffs Harbour, Maitland, Port Stephens, Newcastle, Bathurst, Bega, Jervis Bay, Mollymook, and Milton. Areas such as Mornington Peninsula and the Great Ocean Road remain drawcards for domestic tourists in Victoria, according to Alloggio which plans to continue expanding on the east coast.
Meanwhile, ResortBrokers has just sold a portfolio of management rights in Queensland’s Yeppoon, just north of Rockhampton, for $6.232m.
ResortBrokers director Alex Cook says the recent sale of the Yeppoon Portfolio – of Echelon, Beaches on Lammermoor and Salt – highlighted the investment value of Management Rights.
The Yeppoon Portfolio was one of the first regional, short-stay Management Rights’ transactions post pandemic, he said. Comprising 116 apartments and two manager’s apartments, its sale represent a 15 per cent return on investment.
Gold Coast based Dreamtime Resorts, bought the Management Rights with its net profit of $950,000, from a syndicate led by the Dunn family – private investors from central Queensland – who purchased the portfolio four years ago.
The sale comes as findings by ResortBrokers Research reveal the management rights industry is worth about $4.8bn and employs about 33,000 people.
“ResortBrokers captures more than half of the entire Australian Management Rights’ market with 51 per cent market share and 376 sales over the past five years, worth more than $546m,” Mr Cook said.
“Management Rights is most robust in Queensland although the model exists in most other states and territories under varying legislation.
“The industry is a key cornerstone of Australia’s tourism sector, offering thousands of professionally managed serviced apartments to the market.”
Mr Cook says in the past five years, Brisbane has witnessed the most robust sales of management rights, recording 40 per cent of all transactions; followed by the Gold Coast (28 per cent); Sunshine Coast (12 per cent); North Queensland (10 per cent); NSW (6 per cent); and Melbourne (4 per cent).
Key trends include an increase in high-net-worth private operators, syndicates and private equity competing for the best and biggest management rights. Covid has had almost zero effect on permanent residential management rights but short-stay management rights have been impacted, particularly in the regions while body corporate committees have become more powerful.
“Generally speaking, ResortBrokers anticipates the short-to-medium term outlook for the Management Rights’ market to be extremely positive,” Mr Cook says.
The industry is a key cornerstone of Australia’s tourism sector offering thousands of professionally managed serviced apartments to the market