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APAC hospitality investments in 2013 records highest in five years
With a transaction volume amounting to US$2.63 billion (S$ 3.28 billion), Singapore emerged as the second biggest hospitality investment market in the Asia Pacific (APAC) region in 2013, according to a Cushman & Wakefield (C&W) report.
China bagged the top spot with a transaction volume of US$2.636 billion (S$3.29 billion), while Japan and Australia were ranked third and fourth with US$2.61 billion (S$3.26 billion) and US$2.27 billion (S$2.83 billion) respectively. In total, hotel investments in the region reached its highest level in five years, soaring by over 30 percent to US$12.8 billion (S$15.98 billion) last year.
“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,” said Akshay Kulkarni, C&W’s South Asia and Southeast Asia Regional Director for hospitality services.
During the first half of 2014, overall investment volumes in the APAC region have climbed by 9.5 percent to US$5.2 billion (S$6.49 billion) compared to the same period a year ago. The year-end total is projected to range from US$9 billion (S$11.24 billion) to US$10.5 billion (S$13.11 billion).
Although China, Singapore, Japan and Australia dominated this market segment in 1H 2014, securing 68.8 percent of the investment volume, hotel investments at emerging markets like the Philippines, Malaysia, Indonesia and Sri Lanka have also increased on an annual basis.
“We expect the balance of 2014 to equal or come close last year’s level in terms of transactional activity,” Kulkarni added.
“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 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.”
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
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