The Banana Barracks in Tully is being marketed through JLL Hotels & Hospitality agent Gareth Closter, with the property being offered with a price guide of $4,999,000 reflecting a yield of circa 13.5%.
The property has traditionally been operated as a backpackers that offers local work however through COVID the property has transitioned into a “workers accommodation” facility. The income the property enjoys has shown real resilience through the COVID period, unlike the majority of traditional backpackers facilities.
“In the current market a double digit yield is virtually unheard of, let alone a return in the teens” Mr Closter said. “The year round working conditions in Tully combined with the governments Working Holiday Makers program provides excellent security around the income the property generates” He said.
The Banana Barracks enjoys long term stays from guests, average circa five months, and has excellent relationships with the major local farms whom provide the work for the guests. The Banana Barracks is licensed under the “Seasonal Workers Program” by the federal government which provides a barrier of entry for other accommodation providers and the property has a long history of providing workers to the local community.
The main income stream for the property is derived from the accommodation however there is substantial revenue generated by the nightclub, currently leased for circa $50k p.a., co-op laundry, vending machine & mobile phone accessory sales. Guests pay a weekly rent or approximately $170 per week for the 120 beds and there is rarely any large vacancies.
The property is fully staffed with all wages reflected within the P&L, the current ownership is extremely passive and does no operational work in the business. The property comes with the staff and buyers could continue to operate the business this way or choose to work in the property themselves.
“Unlike many accommodation assets that are highly seasonal and dependent on tourism, the Banana Barracks business is a consistent performer” Mr Closter Said. “I see this as an extremely attractive investment proposition!” Mr Closter said.
