The most investment-grade hotels were found in Japan, Thailand, and Australia. housing
According to JLL data, Hong Kong dominated the Asia Pacific area in terms of hotel investment transactions in the year to September 2017, with 11 deals totalling about $1.5 billion. With $1.2 billion and $335 million in transaction volumes, Japan and Thailand were the second and third most active countries in the area.
Several of the Hong Kong transactions have the potential to be converted into residential or office space. Given the high demand for office space, hotel owners have recently considered transforming their assets.
"Hong Kong hotels attract to investors because of the lower cost per square foot when compared to other asset classes, which has been a factor in recent transactions. Hotels like J Plus Hotel have already been purchased for use as a meeting place, most likely in an office "Mike Batchelor, JLL Hotels & Hospitality Group's Head of Investment Sales Asia, agrees.
In Japan, domestic investors are the most active.
Since 2013, Japan has been a standout performer in terms of hotel investment, with transaction volumes above $1.2 billion as of September 2017. Tourism will continue to grow in the run-up to the 2020 Tokyo Olympics, with the government intending to increase the number of international tourists to 40 million by 2020.
Mr. Batchelor continues, "Traditionally, domestic investors have been the most active buyers in Japan's hotel sector." "However, as market fundamentals improve and Japan remains one of the most attractive debt markets in the region, international investors are becoming more engaged in the country. In terms of investment activity, we anticipate a strong fourth quarter of 2017."
an image of the region
Thailand had another busy year, with hotel sales totaling $335 million, with the city, Bangkok, leading the way. Since 2014, this is the biggest overall volume ever recorded. This year, JLL served as the sole advisor on a number of hotel transactions, including the Premier Inn portfolio and Sukhumvit S27, which sold for a total of $111.5 million. The continuous political stability of Thailand, as well as the relative cost of hotels compared to a number of other Asian countries, are boosting interest in the country.
Due to its high inbound tourism growth, Australia remains a significant preference among hotel investors worldwide, notably among Chinese investors. As of September 2017, investment volume was close to $110 million. "Mainland Chinese buyers have spent roughly $1.4 billion on Australian hotels since 2015," Mr. Batchelor adds, "but given the Chinese government's new restrictions on outbound money, this high demand may moderate in the near term."
Hotel investment volumes in Asia Pacific totaled $5.3 billion in the first nine months of the year, down 22% year on year. Sales activity in the third quarter totaled $1.2 billion across the region, with $1.5 to 2.0 billion in deals projected to finalize by the end of the year. Japan is likely to account for a significant portion of this volume.
"We predict overall year-end hotel investment volumes in Asia Pacific to be between $7.5 and $8.0 billion, down somewhat from $8.6 billion last year," Mr. Batchelor says. "Due to a scarcity of hotels for sale in the market and a pricing difference between buyer and seller expectations, there is expected to be a fall of roughly 10% in 2017."