Worldwide Hotels Group has acquired a newly completed serviced apartment complex along Bangkok’s Sukhumvit Road for THB 1.1 billion ($30.6 million), adding to a string of Thai hospitality acquisitions by the Singaporean budget hotel investor and operator.
Worldwide Hotels, which owns and manages six budget hotel chains including V Hotel and Hotel 81, is paying about THB 6.2 million per key for the 177-key Oakwood Studios Sukhumvit Bangkok in the upscale Thong Lo neighbourhood, as investors look to capture an upswing in the Thai hospitality market.
“Thailand has rebounded strongly from the pandemic lows and has reclaimed its place (as) one of the world’s most evergreen hotels markets,” said Nihat Ercan, senior managing director and head of investment sales for Asia Pacific at JLL Hotels & Hospitality Group. “Furthermore, JLL remains confident in the broader Thailand hospitality sector with the investment volume expected to exceed THB 10 billion this year, (on par with) the 10-year average recorded between 2012-2021.”
The purchase of the property managed by by CapitaLand’s The Ascott Ltd division from SET-listed developer Boutique Corporation marks Worldwide’s third hotel purchase in Thailand over the past five years, with the group controlled by hotel tycoon Choo Chong Ngen previously having picked up a pair of Travelodge hotels in Bangkok and Pattaya.
“This transaction attests to investors’ confidence in the Bangkok hotel market and its long-term investment fundamentals,” said Orn Yomchinda, senior vice president of investment sales at JLL Hotels & Hospitality Group in Asia. “We’re delighted to have advised on the transaction as WWH increases their strategic footprint in the lucrative Thailand hospitality sector.”
The hospitality asset is changing hands after hotel investment in Thailand fell 19 percent in the first nine months of 2022, compared to the same period last year, to total just $90 million worth of transactions over the period, according to JLL in a hotel investment report published in October.
With a flood of sales in the final stages of transacting in the past month, including the Oakwood Studios Sukhumvit Bangkok, JLL sees transactions picking up in the final quarter of 2022, and predicts that full-year transaction volume will reach around $300 million.
“We have closed an additional of over THB 1 billion in transactions last week, (and) have another deal in the pipeline in the range of THB 3 billion to be closed this year,” said Yomchinda. Thailand’s Asset World Corporation (AWC) is also acquiring two hotels, the Grand Mercure Windsor in Bangkok and Phuket’s Westin Siray Bay, she added, with local media reporting the the value of the two transactions at THB 5.6 billion.
That predicted total would be on par with Thailand’s 10-year average hotel investment volumes of THB 12 billion ($335.2 million) from 2012 through 2021, according to Yomchinda, albeit slightly below last year’s THB 12.3 billion total.
The rise in Thai hotel acquisitions in recent months is in line with an increase in visitors to the Kingdom, with overall occupancy for Bangkok hotels reaching 57.2 percent in the third quarter of 2022, according to a CBRE report published last week, with that level of traffic up 35.6 percentage points from a year earlier.
With its latest acquisition of the Oakwood Studios Sukhumvit, which is less than a 10-minute walk from the Thong Lo skytrain station, Worldwide Hotels is joining a number of regional investors expanding their holdings in Thailand.
Between 2012 and 2021, Singaporean investors accounted for around 12 percent of total hotel investments in Thailand, said Yomchinda, noting that in the year to date, that proportion has jumped to about 25.1 percent.
Ramping Up Expansion
Worldwide Hotels’ latest purchase in Thailand was completed about one month after the Singapore-headquartered group told TTG Asia that it is ramp up its expansion plans, both at home and overseas.
In its home base of Singapore, Worldwide Hotels plans to open a 900-room 4-star hotel on Club Street in 2023, as well as another 500-room hotel on Short Street, according to an account in Tatler Asia.
Worldwide Hotels had purchased the 5,121 square metre (55,121 square foot) site for the Club Street property for S$562.2 million (then $415.12 million) in 2019.