Asia Pacific hotel transaction volumes are projected to reach USD 3.5 billion in 2013 on the back of strong investment sentiment to buy hotel assets in the region, Jones Lang LaSalle’s latest Hotel Investment Outlook report has revealed.
This projection represents an improvement on 2012 volumes, where hotel sales activity dropped 30 percent on the previous year to US$3.3billion. Australia and Japan are expected to see the lion's share of investment dollars this year, while pockets of activity will be seen across the rest of the region.
More investors will look to acquire or develop Asia Pacific hotel assets in 2013 as they seek to secure a foothold in the region, according to Jones Lang LaSalle's 2012 year-end Hotel Investor Sentiment Survey. Investor appetite for acquisitions is strongest for Phuket, Ho Chi Minh City, Auckland, Osaka and Tokyo while Asia Pacific hotel markets continue to rank among the highest globally for development sentiment, with Bali, New Delhi and Mumbai appearing in the global top ten.
Despite strong investor sentiment, a low level of established product for sale will widen the pricing gap between buyers and sellers and slow the pace of transaction volumes.
In light of this, investors will continue to consider new developments in order to achieve sufficient scale across the region. Hotel supply in Asia is projected to increase by an average of 5.5 percent per annum across 23 major markets over the next two years.
Other forecast highlights include:
- Inter-regional capital will remain active in Asia Pacific's hotel investment market in 2013. The successful listing of two new hotel REITs in 2012 and more planned for 2013 is likely to result in higher volumes by these groups, for whom diversification is key. REITs have been willing to consider assets in secondary locations to ensure overall viability.
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