Brookfield snaps up Brisbane’s Hotel X

The hotel purchase shows confidence in the hospitality sector is rising, as interest in the Queensland capital surges ahead of the 2032 Olympic Games.

The pool area at Brisbane's Hotel X

Canadian giant Brookfield Asset Management has bought into the hot Queensland accommodation sector by acquiring the Hotel X Brisbane Fortitude Valley, Vignette Collection, a 146-key luxury hotel for about $90m.

The hotel, which was completed in 2021 and includes a ground-floor restaurant, rooftop bar and pool, plus 1438sq m of leased office space, a fitness centre and conferencing space, is a Fortitude Valley lifestyle hub known for its popular dining and retail scene.

The acquisition of the hotel, close to the city’s CBD underscores Brookfield’s conviction in Brisbane, Australia’s fastest-growing capital city that has a thriving hospitality market.

Unlike oversupplied Melbourne, the city is benefiting from strong sector tailwinds ahead of the 2032 Olympic Games, including a lack of new hotel supply, strong economic and population growth, a buoyant tourism industry and robust consumer spending.

Hotel X in Brisbane's Fortitude Valley.

Brookfield co-head of Australia real estate, Ruban Kaneshamoorthy, said hospitality was a growing focus for Brookfield in Australia and across the Asia Pacific, driven by expanding international and domestic tourism numbers and reduced supply, given increased borrowing and construction costs.

Brookfield is one of the world’s largest owners and operators of hospitality assets with a portfolio of $US20bn in assets under management, which represents more than 40,900 keys across North America, Europe and Asia.

“We are actively looking at other hospitality opportunities around Australia as we seek to grow our hospitality platform,” Mr Kaneshamoorthy said.

“With the highest tourism expenditure nationally and its population forecast to grow 40 per cent during the next 25 years, there is a long runway for growth for Brisbane’s hotel market, which is expected to drive significant revenue growth in the medium term.”

The hotel was sold by Pointcorp Development Group which is owned by Paul Gedoun, and Chris Vitale, who is also developing the Mondrian Hotel at Burleigh Heads.

A king room in Hotel X.

CBRE Hotels’ Wayne Bunz and Hayley Manvell handled the sale via an off-market process. Mr Bunz said it was a no-brainer as to why Queensland was a hot investment opportunity for hotel investors, adding that he had also just sold the Rydges Gold Coast for $60m.

“The growth of Brisbane, interstate net migration of 100,000 a year, the capital projects means demand is far outstripping supply; added to that we have the Olympics – there are a number of people looking to enter the Queensland hotel market,” he said.

“The sale of Hotel X represents a landmark transaction in the Brisbane hotel market, building upon a string of high-profile hotel sales and reinforcing Brisbane city’s position as a hotspot for hotel investment.

Launched globally in 2021, Hotel X Brisbane, Vignette Collection is IHG Hotels & Resorts’ first collection brand and represents a curation of distinct hotels, demonstrating diversity and discovery.

The deal is expected to close by the end of this year.