Find out why there are a few hotel transactions in Singapore compared to other markets

Julien Naouri of Savills Singapore will share his insights.

Julien is an Associate Director within the Savills Hotels business line in Asia Pacific and focuses upon the acquisition and disposal of hotel and serviced apartment assets across the region. Based in Singapore, Julien works with representatives of the Savills Hotels business line in Asia Pacific, as well as resources within the broader Savills global platform, to provide clients with specialist consulting, valuation and investment related services associated with hospitality related assets and developments.

Julien joined Savills Hotels in 2012 and brings 6 years of marketing, transaction, development, operator selection and valuation expertise.

Prior to joining Savills Hotels Asia Pacific, he spent the last 5 years as a Manager with CBRE Hotels based in Singapore and Paris where he focused on Capital Markets assignments, Strategic Reviews and Feasibility Studies. Julien attended the Ecole Hoteliere de Lausanne (Switzerland) from where he graduated with a Bachelor of Science in International Hospitality Administration.

Julien will be speaking about the Effects & Implications of Singaporean Investors Bingeing on Hotels at the upcoming SBR Industry Insights. Here's more about Julien:

What are your previous experiences and positions held that contributed to who you are as a professional today?
I started working in 2008 in Paris for CBRE Hotels and then moved in 2010 to CBRE’s Singapore office. At CBRE I worked on brokerage projects such as the Park Regis Singapore, the Hilton Melbourne, the Hilton Nagoya and a high profile Japan Hotel Portfolio. I quickly developed my analytical skills and was responsible for supporting both the advisory and brokerage service for APAC.

In 2012, I joined Savills Hotels as Senior Manager and focused solely on brokerage. I commenced securing mandates and in 6 months closed the sale of E Hotel Shinjuku in Tokyo. Closely followed by b Roppongi, Tokyo and 3 Comfort Hotels in Japan. To date, I have disposed hotel assets in Thailand, Japan, Indonesia, Vietnam, and Europe. My astute observations and quick thinking soon led to me becoming a trusted broker for major international funds.

What are your key business philosophies?
I’m a pivotal part of the team both in production but also in fostering culture. I have bridged a gap between our Asia and EMEA teams. I am a conscientious worker who speaks his truth quietly. Investors listen to my considered and thoughtful comments on the market. I am the opposite of the brash brokers who often characterise the industry.

After attending Ecole Hôtelière de Lausanne, I worked under well know stalwarts of the industry in Paris and Singapore. My analysis is always multifaceted. Both my work and person are elegant and refined, bringing a French savoir vivre to everyday life in the office. I am extremely approachable and friendly but above all, always professional.

Can you give us a glimpse of what you will talk about at the SBR Industry Insights Series?
After a busy year for hotel transactions in 2013, the market is very quiet in 2014 and 2015 so far. Due to the geographic idiosyncrasies of the Singapore hotel market and Singapore’s small land size, prime hotel locations are very scarce. Hotel operators only want to be in prime locations.

The hotels on the market tend to be properties which have been on the market for a long time. Hotel owners in Singapore tend to be companies with very little debt pressure, even if hotel performance drops, given their high liquidity they are not willing to sell. Therefore, there are very few hotel transactions compared to markets such as the US.

SG Institutional investors are currently focusing on Japan and Australia within APAC, however we can see some transactions in Southeast Asia involving Singapore HNWI or Private Equity funds. Many Singaporean investors would like to invest in Japan but often cannot compete with the robust bidding of local Japanese investors. Furthermore, construction costs have increased, making developments and refurbishments untenable for Singaporean listed companies.

Despite the increasing willingness of investors to look beyond core gateway cities such as Tokyo, Sydney, Hong Kong and Singapore, sourcing stock remains an issue. It was expected that more single assets would be sold out of last year's portfolio deals, but this did not materialise.

This lack of stock combined with improved investor demand and confidence in the sector has meant that yields have compressed over the first nine months of the year. Continued pipeline constraints may result in additional downward yield pressure going forward