Singapore's hotel investment volume hit US$1.47b

Weaker demand, price competition bar growth.

According to Savills, Singapore witnessed US$1.07 billion worth of investment transactions in Q3/2013, which brings the total YTD investment volume to US$1.47 billion.

Here's more from Savills:

This quarter, a total of five hotels, mostly in the mid-tier to upscale category have changed hands. The average transaction price for the most recent transactions exceeds S$1 million per room.

Nonetheless, the mix of a weaker events calendar, slower corporate demand and price competition from newly opened hotels has reduced hotel trading performance this year.

According to the Singapore Tourism Board, Singapore’s average revenue per available room was down 3% yearon-year in the first seven months of this year.

Consequently, acquisition cap rates have been compressed to as low as 3.5% to 4.0% for some recent transactions, such as Grand Park Orchard, Hotel Gallery and Hotel 1929.