Hotel investment volumes in Asia this year reached USD3.9 billion at the end of Q3 2013, up 145 percent on the same period in 2012, according to the latest research from Jones Lang LaSalle’s Hotels & Hospitality Group (H&H). The quarter itself recorded a robust USD1.2 billion of transactions, up 41 percent on Q3 2012, as the market continues to experience its strongest year since the Global Financial Crisis.
The strength of the region’s tourism markets is contributing to an overall sense of optimism in hotel investment across Asia, pushing price benchmarks past their 2007 peak with Japan (33 percent) and Singapore driving the solid sales activity. Accounting for 16 percent of the year’s transactions to date, the Singapore investment market continues to experience strong demand from overseas investors given its consistently high occupancy rate and tourist arrivals.
Of total hotel investment volume recorded this year, Jones Lang LaSalle has acted as advisor for USD1.9 billion in deals throughout Asia.
Mike Batchelor, Managing Director Investment Sales, Hotels & Hospitality, Jones Lang LaSalle said, “Hotel trading performance in Asia has experienced a significant turnaround over the past two years and nowhere more so than in Singapore. This quarter’s landmark transaction of the Grand Park Orchard Hotel and adjoining Knightsbridge retail podium heralded the single largest asset deal in the City’s history. Going forward, we are aware of approximately USD1.3 billion in exchanged contracts that will contribute to a very strong pipeline over the remainder of the year.”
“As investor confidence in the region continues to rally, the availability of investment grade hotels is becoming increasingly scarce and, as a result, we are seeing buyers turn their attention towards markets such as Thailand, Seychelles and the Maldives. The Maldives is proving a particular hotspot where contracts have just been exchanged on what will be our fourth transaction in the country in as little as two years.”
“While the market is beginning to feel some restriction from a limited pipeline of hotel listings, the unrelenting strength of demand across both private and institutional investors will ensure that transaction volumes remain healthy. Given the volume of hotel deals that are due to settle before year-end, we are increasing our regional full year total sales projection from USD3.5 billion to USD5.5 billion, confirming 2013 as the strongest year since 2008.”
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