Hotel investment sales in Singapore likely to hit new high in 2019: JLL

Singapore is on course to close out 2019 with record high hotel transaction volumes of S$2.5 billion (US$1.8 billion), buoyed by increasing tourist arrivals, infrastructure developments and limited hotel supply, according to JLL.

The latest research from the global real estate consulting firm reveals that Singapore’s hospitality industry has seen an uptick in properties changing hands, including the sale of existing assets and land sites, totalling approximately S$1.7 billion so far this year.

Hotel investment sales in Singapore in 2019 likely to hit new high at US$1.8 billion: JLL

“Despite ongoing geopolitical uncertainty, there remains a strong weight of global capital seeking opportunities in what our investors perceive as safe haven destinations. As a key global gateway city, Singapore remains high on our clients’ radar, largely supported by its positive trading performance, strong visitor arrivals and new tourism initiatives,” explained Nihat Ercan, managing director, head of investment sales Asia, JLL Hotels & Hospitality.

In September, JLL advised OUE in an agreement to sell Oakwood Premier OUE Singapore at S$289 million – the largest hotel transaction in Singapore to date this year. The buyers are joint venture firms formed by Hong Kong financial services firm AMTD Group and hotel operator Dorsett Hospitality International, a subsidiary of Hong Kong-listed property giant Far East Consortium International.

“This deal represents the unwavering investor confidence in Singapore. The city’s hotel sector remains resilient with average room rates per night and occupancy levels staying positive. Notably, occupancy registered at 93.8 per cent in July 2019, the highest monthly level since 2005,” said Ercan.

With the island nation attracting more than 11.1 million visitors in the first seven months of 2019, tourism is expected to continue to support hotel trading performance. Major inbound source markets showing notable year-on-year growth during the period include China (+5.2 per cent), Japan (+7.3 per cent), the Philippines (+6.0 per cent) and the US (+11.5 per cent), according to Singapore Tourism Board’s latest figures.

The local government has also put in place several infrastructure developments, including plans to introduce new attractions at the Greater Southern Waterfront, the expansion of Marina Bay Sands and Resorts World Sentosa, as well as a new ecotourism hub in Mandai, and an integrated tourism development at Jurong Lake District.

“The overall outlook for Singapore’s tourism sector is positive and the hotel market is expected to benefit from the robust supply and demand fundamentals in the short to medium term,” said Adam Bury, senior vice president, investment sales Asia, JLL Hotels & Hospitality.

He concluded: “In the long term, we foresee that the government’s strategies and infrastructure investments will support Singapore as a desirable destination for tourists as well as attract investors seeking stable secure capital appreciation.”

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