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Hotel investment transaction in Singapore plummeted by 78.9 percent to US$377.2 million (S$510.28 million) in 2014 compared to the preceding year, according to a Savills report.
Among the notable local deals during the period is the sale of the 396-room Midlink Hotel in Middle Road to China’s Nanshan group for S$270 million or about S$676,400 per room.
In contrast to the sluggish domestic sales market, Singapore was the largest foreign buyer of hospitality properties in China last year. During the period, Singaporean entities purchased a total of eight assets there with a combined value of US$306 million (S$413.96 million) in places like Beijing, Xi’an, Dalian, Wuhan, Hangzhou and Chongqing.
Another offshore hotel deal by a Singaporean company in 2014 was the acquisition of a 30 percent stake in a portfolio of six hotel assets in New Zealand by Millennium & Copthorne Hotels Group for US$39.5 million (S$53.44 million).
In spite of the weak hotel sales locally, the performance of the republic’s hospitality industry remained strong last year, based on the latest data from the Singapore Tourism Board (STB). Revenue per available room (RevPAR) of upscale hotels has increased by 0.6 percent in the first 11 months of 2014, while economy-class establishments posted a higher growth of 22.3 percent.
Looking ahead, hotel investment sales in Singapore are expected to remain soft over the next few quarters due to greater global economic uncertainty, as the low-yield environment and the looming interest rate hike could deter investors from buying hotels.
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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