HOSPITALITY investments rose to a five-year record high in 2013 for the Asia-Pacific region, according to global real estate consultancy Cushman & Wakefield. While China, Singapore and Japan led the charge, emerging markets will have a bigger role to play in the near future.
Cushman & Wakefield reported that hotel investments grew 30 per cent from 2012 for a total of US$12.8 billion.
China accounted for the largest share of total investment volume at 20.5 per cent or US$2.636 billion. Singapore took second place at US$2.63 billion, followed by Japan with US$2.61 billion, and Australia with US$2.27 billion.
Investment last year was spread over a wider range of countries including emerging and non-core markets such as Cambodia, Macau and the Maldives.
Akshay Kulkarni, regional director, hospitality services for South Asia and South-east Asia, Cushman & Wakefield, said: “Hospitality investment volume in 2013 more than doubled since 2008 and can be attributed to the excess liquidity, the low borrowing costs, and the region’s favourable tourism growth and outlook.”
Investment volumes for 1H2014 totalled US$5.2 billion, a 9.5 per cent year-on-year increase, though full-year figures are expected to come in at US$9-10.5 billion.
Asia-Pacific’s strongest hotel markets Japan, China, Singapore and Australia are still the most traded and make up 68.8 per cent of investment volume, but emerging markets like the Philippines, Malaysia, Sri Lanka, and Indonesia have seen more action as compared to the same period last year.
China has seen investments of more than US$1.5 billion in 1H2014, but the Cushman & Wakefield report expects this to taper in the second half of the year.
On the other hand, India, Thailand, Indonesia, the Philippines and Sri Lanka stand to gain with major transactions to be closed. Myanmar and Cambodia have witnessed renewed interest in their hotel markets and “could become viable investment destinations”, said Kulkarni.
Kulkarni explained: “We expect the balance of 2014 to equal or come close last year’s level in terms of transactional activity. Japan has already seen significant investment volume and will undoubtedly improve further and lead the pack, due to strong corporate demand and greater investor optimism arising from (Japanese prime minister Shinzo) Abe’s economic reforms. Lower hotel transaction volume is expected for Singapore this year compared to last year, at least in the organised institutional side. However with the change in norms on the shophouses, those that have approved hotel licences will see high guest demand.”
