Singapore amongst gateway cities in APAC for hotel investment

APAC hotel investment volumes were over US$2.9b.

Hotel investors remain focused on gateway cities in Asia Pacific such as Singapore, Hong Kong, Sydney and Melbourne in the first half of the year, a new report from JLL said.

Asia Pacific hotel investment volumes in the first half of 2017 were just over US$2.9b, with a shortage of investment grade hotels on the market compared to the previous few years. JLL recorded 28 hotel deals across six countries that amounted to over 5,000 keys, with the average price per key of all transactions recorded at US$486,600.

However, Australian cities remained a favourite for Asian-based hotel investors, with several buying opportunities coming onto the market recently. The hotel investment market in Australia remained active with a number of key transactions across Sydney and Melbourne. The majority of deals took place in Melbourne, with the exception of the InterContinental Sydney Double Bay selling for US$104m, the highest value recorded for a suburban hotel in Sydney. The property was acquired by a China-based consortium of investors.

“Hotel transaction activity is expected to continue in Australia throughout the year given the low-interest rate environment, sound economic growth outlook and weaker Australian dollar,” JLL Hotels & Hospitality Group head of research for Asia-Pacific Frank Sorgiovanni said in a statement.

He added, “However, opportunities to acquire hotels in many gateway Asian destinations is limited and investors continue to seek alternative investment in emerging markets such as Vietnam or Cambodia, where arrivals’ growth is strongly supported by Chinese tourism."