ABOUT RAG

Regional Accommodation Group

At Regional Accommodation Group, our purpose is to identify, procure, and manage leasehold regional motel businesses that deliver a target return of 12% per annum cash yield paid monthly to our investors.

WHAT WE DO

We invest in leasehold regional motel businesses that fit into a proven investment matrix model that delivers a target return of 12% per annum cash yield paid monthly to our investors.

The motel industry comprises of some 2,400 establishments turning over a combined $3.0 billion of revenue, generating an annual EBIT of $340 million (Source IBIS World Industry Report H4402 Motels in Australia 2017 – 2018).

The largest services segment in the industry is three-star accommodation making up more than 60 percent of the total graded motel room supply. The motel industry exhibits low market share concentration and is highly fragmented, with no individual operator holding a significant share of the market.

Regional Accommodation Group Pty Ltd (RAG) has developed an investment matrix that delivers significant and consistent cash returns prior to factoring in any improvements in occupancy rates, room rates and operational efficiencies that it will achieve through increased market awareness of each of the motels through its own branded motel chain, corporate account strategies and technological improvements across the group. The Initial Investments demonstrate acquisitions in this space can achieve high returns and strong reliable cash flows at low entry prices under the investment matrix metrics:

3 to 4 star motels
Average purchase price of earnings before interest and tax not to exceed a pre-determined multiple.
Motels with minimum of 35 rooms
Motels in good repair requiring little capital improvement outside of owner agreed expenditure
Lease term of minimum of 25 years
Average occupancy lease rental expenses not to exceed a pre-determined % age of revenue
Geographical diversification by town within a portfolio of motels positioned in regional Australia
One motel acquired for each targeted town to limit the competition within the group

ACQUISITION DEAL FLOW

RAG has acquired four regional motels since commencing in November 2019 and all investments have performed without any unidentified “surprises” post settlement. RAG has established networks and supply contacts for transactions off market within its investment matrix.

INVESTMENT ENQUIRIES

Dominic Quilligan

Managing Director

Nicholas Bonifant

Investor Relations