APAC Hotel Investment to Hit $12.2B in 2024 as Japan Drives Deal Volume: JLL

Asia Pacific hotel investment is likely to surpass $12 billion for the full year after transaction volume totalled $9.05 billion in the first nine months of 2024, led by dealmaking in Japan, according to JLL.

Full-year investment in APAC hospitality assets is expected to grow 4.3 percent to $12.2 billion after a 15 percent year-on-year rise during the January-September period, the consultancy said. Large transactions have driven cross-border investment in Asian markets as Australia has experienced a lull in activity, JLL reported in its APAC hotel update.

A positive macroeconomic outlook, supportive interest rate policies and solid consumption factors point to hotel investment comfortably eclipsing last year’s total of $11.7 billion, said Nihat Ercan, CEO of JLL’s APAC hotels and hospitality group.

“Investors have consistently shown an appetite to play larger in the hotel sector in Asia Pacific and we see no signs that activity will wane in the last quarter of 2024, making us increase our investment volume forecast to $12.2 billion,” Ercan said.

Eastern Star

With this year’s foreign tourist spending in Japan having already topped 2023’s record annual level, Asia’s second-biggest economy continues to be the region’s most attractive hotel market.

Investment in Japanese hotels through the end of September totalled $3.8 billion, fuelled by a pair of mega-deals: the $593.1 million trade of The Park Front Hotel @ Universal Studios in Osaka and Singapore sovereign fund GIC’s $435.5 million disposal of the Hilton Fukuoka Sea Hawk in a transaction brokered by JLL.

JLL forecasts total Japan hotel sales of $4.7 billion in 2024. Despite the recent interest rate hike and slight firming of the yen, the consultancy anticipates Japan hospitality investment to remain active given strong supply and demand fundamentals, with volume to grow a further 4 percent to $4.9 billion in 2025.

A short hop across the sea in South Korea, hotel transaction volume reached $1.1 billion in the year to date as ARA Asset Management’s $315.4 million purchase of the Conrad Seoul from Brookfield topped the table. JLL expects several more hotels to change hands before the end of the year, resulting in estimated transaction volume of close to $1.3 billion for all of 2024.

In Singapore, meanwhile, full-year hotel investment volume is estimated at $1 billion after the first nine months saw high occupancy rates and January’s market-leading $178.5 million trade of the G Hotel near the Bugis area. The repositioned and rebranded property opened its doors as Lyf Bugis Singapore in August.

Room Rates Rebound

The APAC hotel sector is benefiting from higher average daily rates post-pandemic, with rates up 19 percent on average in local currencies compared with the last cyclical peak in 2018-19, JLL said.

And while occupancy rates are still recovering in some markets, an overall positive trend is supported by the return of international visitors and the relaxation of visa restrictions in key markets, according to the report.

“Although there are some markets that may see some short-to-medium term easing of occupancy, the overall industry has entered a new phase less defined by recovery and more linked to ideas of organic and sustainable growth,” Ercan said.