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Investor sentiment for transacting hotel properties in the Asia Pacific (APAC) region for the next two years remained largely unchanged at 58 percent, according to JLL’s Hotel Investor Sentiment Survey.
This is the highest level of optimism globally, compared to 39 percent of that for Europe, the Middle East & Africa (EMEA), and 32 percent of that for North America.
However, investor sentiment for trading APAC hotels over the next six months fell to 31 percent, down from 58 percent in the previous research. Although North America got a higher rate of 41 percent, Asia Pacific beat EMEA’s 22 percent.
“Performance has been diverse across the region during the past 12 months. Several countries experienced positive exchange rate fluctuations against the U.S. Dollar and, as a result, demonstrate stronger positive average daily rate (ADR) and revenue per available room (RevPAR) growth rates, while Northeast Asia recorded greater stability in respect of exchange rates, thereby witnessing a less significant shift in key hotel performance measures.”
In the investment cycle, Singapore’s hotel property market is in the early downturn stage, while Shanghai and Tokyo are in the early upturn phase. Sydney is in the late upturn stage while Hong Kong is at the peak of the cycle.
Moreover, investors expect that hotels in Manila will give them an initial yield (cap rate) of 7.8 percent, the highest in the region. This is followed by Bangkok, Kula Lumpur, Jakarta, Bali and Auckland with at least 7.1 percent.
The cap rates for Melbourne, Shanghai, Seoul, Beijing and Sydney range from 6.1 percent to about 6.5 percent. The initial yield for Taipei is around 6.0 percent. The figure for both Osaka and Singapore stands at 5.3 percent while Hong Kong and Tokyo are tied with 4.9 percent.
Meanwhile, global transaction volume rose 28 percent in January to November 2015 compared to the same period a year ago. It is also on track to exceed JLL’s full year forecast of USD68 billion. “However, deal volumes and asset valuations appear to be plateauing,” it said.
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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