21st May, 2019
Let’s take a look at some positives for the Far North Queensland region
SilkAir announced they will be increasing to a daily flight from June 2019. The airline currently operates five times per week connecting Cairns to the world via Singapore.
Cairns Airport Chief Commercial Officer Aviation, Paul Mclean, said “the increase to daily services will open a wider range of options for international visitors to conveniently access Cairns and the Great Barrier Reef. The additional flights are well timed to connect Singapore Airlines’ European flights.”
One of the highlights for the month was the return of Air New Zealand return flights to Cairns with daily flights to meet peak season demand.
Qantas has announced a boost in seats and frequencies to Cairns Airport. From 31 March 2019 the national carrier will add eleven additional return flights between Brisbane and Cairns, and more capacity between Cairns, Sydney and Melbourne. Qantas will also resume . daily flights between Cairns and Port Moresby.
Positive news from Cairns Regional Council
City Centre Master Plan.
The Master Plan will guide the future development of a connected, liveable city centre with public spaces that embrace the region’s tropical lifestyle and natural assets.
Included in the plan:
Additional space for outdoor dining on the Esplanade, while extending the Espla-nade Dining Precinct to cover Shield Street between Abbott Street and the Esplanade.
Developing the Cairns Gallery Precinct, transforming the iconic, heritage listed Cairns Art Gallery, former Court House and former Mulgrave Shire buildings into a world-class precinct that celebrates the city’s cultural heritage.
A makeover of Florence Street to create a pedestrian friendly connection from Munro Martin Parklands and the Cairns Performing Arts Centre, past the Cairns Aquarium to the Esplanade.
A new over water pier and viewing deck at the eastern end of Florence Street, and a proposed expansion of the parklands north of the existing promenade section.
At the far northern end of the parklands, a new boardwalk through the mangroves.
Money for Cairns, please!
Cairns Mayor Bob Manning has called on the Queensland Government to give the city its fair share of the funding pie in the upcoming state budget.
Cr Manning has submitted a list of investment and infrastructure priorities that were identified in the Cairns 2050 Shared Vision
Key projects include:
Major investment in the Cairns road network,
$90 million to establish a research institute at the Cairns Hospital,
A commitment toward Nullinga Dam to shore up the region’s future water security, and completion of the Cairns Convention Centre expansion.
“We also look forward to the timely completion of the shipping channel development and the Smith-field Bypass. “Each of these projects have been supported by all levels of government and major regional stakeholders through the Cairns 2050 Shared Vision,” Cranning said.
“This is a crucial time in Cairns’ development as a world class tropical city. We are simply seeking our fair share to help our region to thrive for years to come.”
Looking back: How the wonderful world of management rights fared for 2018: The number of M/R properties sold in Queensland for the Calendar year 2018 was approx. 148 properties, compared with 177 in 2017, 186 in 2016 and 244 in 2015.
Pretty much a downward trend overall and take note that about 10% of these sales were in North Queensland, clearly reflecting the current lower demand for properties up this way. Also in a buyer’s market where most properties sold may not have achieved the average area multiplier. There are approx. 2,350 management rights properties in Queensland with less than 200 being in Cairns, Cairns Beaches and Port Douglas.
Multipliers in TNQ are also further down on last year and reflect this flat market, evidenced by an industry average of approx. 3.8 to 4.3 X the business net value.
Some would say this reflects a temporary loss of purchaser interest in this area specifically for holiday letting properties. We at CBMR are a lot more optimistic and believe the tide is turning and the smart Operator should be planning their exit strategy.
The standing of a good quality well run “Mum and Dad” property remains rock solid as does most other accommodation properties in the area. Managers are enjoying rising occupancies and room rates and with little additional serviced apartment construction coming online are set to reap the benefits.
Aussie dollar and interest rates likely to spend 2019 stuck in neutral, experts say:
Interest rates are still excellent for a business purchase into the industry and should continue to motivate the market somewhat for this year. All in all it has never been a better time to buy into this industry and I believe we will see further growth this year. Purchaser caution continues to remain at present and this is reflected throughout the economy as a whole. However the tide is turning and the banks while still a little nervous are continuing to fund many new entrants into this industry. They recognise the stability and low risk of the management rights business.
North Queensland’s fortunes are on the turn, evidenced by the foresight of Crystalbrook with the development of three new hotels under development for $500m in the Cairns CBD, the first of Nova City’s $550m seven towers about to start and the proposed new Cairns Global Tourism Hub under firm discussion with the State Government.
We at CBMR are proudly working on the new Sealink Terminal Complex in Townsville with the Honeycombe Group and are about to appoint a top branded Operator for the Hotel component.
Calvin Bailey Management Rights is ticking over well in quite exciting times with our new unit sales initiative settling a number of sales over the last few months and management rights sales moving along with currently a number of properties either under offer, at contract or about to settle.
Alex has delivered a breath of fresh air into our business and is available to talk to you at any time. We are optimistic about the future and are already seeing positive signs from quality new buyers who recognise the value of obtaining a low risk management rights business in this area at a multiplier which is a lot less than the SE quarter.
We believe we will see a lot of further stabilization in the market place by mid this year and the start of a whole new cycle for Australian tourism, and specifically for Tropical North Queensland