Quest reaches profit share agreement in new rent deals

George Sell George Sell Uploaded 23 July 2020

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Australia: Quest Apartment Hotels has reached rental agreements with the “overwhelming majority” of its landlords.

Chief operating officer David Mansfield said the company is working to reach “amenable outcomes with all parties”.

“As it stands, the overwhelming majority of Quest properties have managed to reach agreements on the basis of abatement, turnover or profit share, with only a small percentage requiring mediation,” he said.

“We are grateful for the level of understanding and comradeship our landlords have shown our franchisees and thank them for their continued support as we confront many more months of uncertainty.”

A Quest spokeswoman said in some instances, a combination approach had been adopted in determining rent: “That is, in exchange for an abatement of rent, landlords have been offered compensatory profit share.”

The Australian Financial Review reported in early April that many Quest franchisees had stopped paying rent after bookings plummeted.

Quest operates 140 hotel properties in Australia under a franchise model. Individual apartments are then sold to investors on long leases of up to 30 years.

The company is seeing widely varying levels of occupancy: “Some of our metropolitan properties are under enormous pressure, while a select number of regional properties, in locations where Quest has market share, are performing quite well,” said a spokeswoman.

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