Hotel Investment Deals in Asia Increased 218% in 2013

The value of hotel investment transactions in Asia climbed to US$7.5 billion in 2013, up 218 percent over 2012 to reach the highest levels since the financial crisis in 2007.

The rebound in hotel asset values and deal numbers was led by activity in Japan, Singapore and China, according to a study released today by international real estate consultancy JLL.

The report by the company’s Hotels & Hospitality Group predicts that the hotel investment market will continue to climb in 2014, although transactions volumes are expected to decline due to a decreasing supply of available assets.

Japan led all countries in Asia for the value of hotel investments in 2013 with a total of US$ 2.7 billion in deals, up 480 percent over 2012, as hotel trading performance improved in line with the expansion of the domestic economy and renewed growth in corporate and leisure travel.

2013 was also a remarkable year for the Singapore hotel market with capital values reaching new records, resulting in transaction volumes of US$2.0 billion, over ten times that recorded in 2012, predominantly supported by the sale of Grand Park Orchard hotel and Knightsbridge retail, the City’s largest single asset transaction to date.

In third place, China accounted for around 13 percent of total investment activity, recording US$ 1.1 billion of transactions, as recent government announcements to improve access to financing drove investor sentiment over the second half of 2013.

Other markets that experienced strong growth in the region as a result of improved connectivity and burgeoning outbound travel from Mainland China, include Hong Kong (US$ 486.7 million, up 19% y-o-y), Thailand (US$ 337.0 million, up 31% y-o-y) and the Maldives, which recorded US$ 267.6 million in transaction volumes over the year, up a huge 614 percent on 2012.

Mike Batchelor, Managing Director Investment Sales, Hotels & Hospitality, JLL said, “Strong investor sentiment and, importantly, the availability of quality hotel assets were key reasons behind Asia’s impressive sales volume in 2013 which was hindered only by the availability of additional stock as many owners increasingly hold off selling assets in anticipation of further market growth.”