- Veriu Group rapidly expanding in NSW.
- Hotel group's success driven by strategic placement of hotels in catchment areas.
- Accommodation group buoyed by post-pandemic travel bounceback.
Since the start of 2023, the accommodation management group, Veriu Group, has been aggressively expanding in New South Wales, unveiling a slew of hotels under its Punthill and Veriu brands. This news may come as a surprise, considering how the property sector has been floundering through recent years, with a volatile economy, multiple interest rate hikes, and accelerating construction costs.
Long-term leasing and key catchment areas are ingredients for success
“I think our success is predicated on two things. First up, there’s our unique long-term lease model which has continued to prove a really attractive option for developers who are looking for certainty of income and ability to finance large scale developments more easily in the current market,” said Veriu Group CEO, Zed Sanjana.
“Secondly, we’ve always maintained a very disciplined focus on developing properties specifically situated to take advantage of substantial key catchment areas, which have been or are relatively underserviced in terms of quality corporate accommodation. If you look at our portfolio across both brands, every hotel is ideally positioned to be able to provide both corporate and leisure guests with premium accommodation in prime locations.”
Together with HOLDMARK Property Group, Veriu Group is halfway through constructing the Veriu Macquarie Park. Boasting 184 studio and one-bedroom apartments, the hotel will be the largest in the area.
Being situated in Macquarie Park, a prominent business and technology hub in Sydney that houses a variety of multinational corporations and research institutions, the hotel is expected to cater to large volumes of business travellers and working professionals that visit the area.
Another project that Veriu Group is involved in alongside HOLDMARK is its soon-to-be-built Punthill Ryde hotel. In line with the strategy of securing properties in key catchment areas, the Ryde property will be situated near business districts to attract their patronage.
The group is also planning to expand elsewhere in Australia over the coming 12 months in Melbourne and South Australia.
The post-pandemic return of travellers
An additional reason for the confidence and continued efforts to further expand in Australia is the substantial, bottled-up demand for travel post-pandemic, which has driven the Average Daily Rates (ADR), by the end of December 2022, above pre-pandemic levels across every major market.
Indeed, Tourism Research Australia predicts that international visitor arrivals to surpass pre-pandemic levels by 2025.
“Nationally, market ADR has increased by 24% over the year, reaching $228, which is 23% higher than the rates observed in 2019. That points to a strong recovery in the hospitality industry, with both ADR and occupancy trending positively and approaching, or even surpassing, the levels seen before the pandemic.
“We’re well positioned to meet this demand, and increased top line performance is also significantly assisting our ability to provide developers with more compelling cashflows to support new hotel developments,” said Sajana
The group has taken the portfolio of hotels from 14 to 21, since 2020, and is eyeing down more across the eastern seaboard.
“This number is set to rise to 25 with the openings of Veriu Macquarie Park, Punthill Maitland and Punthill Tuggeranong in 2024,” said Sajana.
More are planned for Liverpool, Geelong, and beyond, with a larger goal also in sight:
“We’re currently targeting around 80 hotels by the early 2030s, partnering with top tier developers and local businesses along the way and we have every confidence we are going to get there,” said Sanjana.
