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Nov 10,2019

Jones Lang LaSalle (JLL) Report Says Hotel investments in Asia-Pacific Growing Rapidly

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Jones Lang LaSalle (JLL) Report Says Hotel investments in Asia-Pacific Growing Rapidly
Nov 10,2019

Real state consultancy firm, Jones Lang LaSalle (JLL) said in a report a fortnight ago that hotel transaction volumes in the Asia-Pacific region are expected to increase by 25 to 30 per cent year-on-year to more than US$11 billion in 2019.

Mike Batchelor, the consultancy’s chief executive told Thailand Hotel News in an exclusive interview  “Despite a cautious economic climate and wider political headwinds, hotels in Asia Pacific present an attractive yield profile amid booming tourism demand, in the context of falling interest rates and bond yields. Much demand this year has been buoyed by private equity firms, developers and domestic clients. This leads us to believe that 2019 will be the third most highly-transacted year in the past decade. To date, only 2017 and 2015 have surpassed the US$11 billion threshold.”

The real estate consultancy company said that for the first nine months of the year have already seen US$7.8 billion worth of hotel investments in the region. Thanks to Japan and its series of mega events such as the 2019 Rugby World Cup, 2020 Tokyo Olympic Games and 2025 World Expo, the country has reached close to US$3 billion of transaction volumes so far.

Mr Batchelor further added, “These tourism drivers will boost the need for accommodation assets, with investors looking to capitalise on the wave of demand. Japan is the region’s top performing market and forecast to hit a record high of US$4 billion in transaction volumes this year.”

All over the Asian region, the hotel market outlook remains positive. Not only are there the Chinese Tourists, but India is also emerging as a lucrative market with its rich and middle classes travelling a lot these days. Over in China, softening office leasing demand and sluggish retail sales have turned investors’ attention towards hotels, where trading performance has been resilient.

Singapore has also seen a few landmark deals this year. In September, JLL advised OUE Limited in an agreement to sell Oakwood Premier OUE Singapore to a Hong Kong joint venture for $209 million. Most recently, JLL concluded the US$344 million agreement to sell Andaz Singapore in the largest single-hotel asset transaction ever in the island city’s history.

The JLL report reveals that while domestic investors have been active in their home markets, particularly in Japan and China, there remains an influx of foreign investment looking to tap into the region’s strong tourism growth and high yields.

Many American, European and also Middle Eastern investors are also turning their attention to the Asian markets.