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Sales of hotel properties around the world are expected to increase by 15 percent on an annual basis to reach an eight-year high of between US$65 (S$87.25 billion) to US$68 billion (S$91.28 billion) in 2015, according to a JLL report.
The bullish forecast is attributed to a surge in off-shore capital, strong demand fundamentals, record levels of single-asset transactions, higher liquidity in debt markets and better portfolio activity in secondary markets, said the consultancy.
As for the Asia Pacific region, total transaction volume is forecasted to climb by 15 percent to about US$8.5 billion (S$11.41 billion).
“After a record year of transactional volume in Australia, foreign buyer activity for prime CBD hotels has certainly not slowed, especially with the continued and strong investment interest from China,” said Craig Collins, CEO of JLL Hotels & Hospitality Group for Australasia.
“We also expect metropolitan and regional hotels to remain a major focus of domestic, and increasingly, offshore groups. Australia’s stable government, transparency and growing tourism make it a continued safe haven for buyers,” he added.
Meanwhile, Middle East investors and US-based private equity funds are expected to remain among the top exporters of capital, but it’s China who will take the lead in terms of year-on-year growth in capital deployed.
“Chinese outbound capital experienced unprecedented growth in 2014 driven by the strength of China’s growing economy and appreciating currency. Towards the end of last year China’s Ministry of Commerce relaxed policy restrictions on big-ticket foreign investments and simultaneously loosened the approval process for overseas purchases. This adjustment allows Chinese investors to more easily access key global markets such as New York, San Francisco, London, Paris and Sydney.”
As such, Chinese outbound capital is projected to surge by fivefold to US$5 billion (S$6.71 billion) in 2015 from last year. This puts Chinese investors among the ranks of top capital exporters like the US and Middle East after not making it to the top-ten list a few years ago.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
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