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Buyers of Singapore hotel properties adopted a cautious stance during Q1 2015 amidst sky-high prices and limited stock of available assets, revealed CBRE and reported in the media.
“Investors turned more cautious during the period and became more rational and analytical when evaluating potential deals,” said Junrong Teo, Assistant Vice-President at CBRE Hotels for Asia Pacific.
As a result, there was only one hotel transaction in the first quarter of the year, which was the sale of Capri by Frasers at Changi City (pictured) to Frasers Centrepoint for US$148 million. The seller in the related-party deal was Ascendas Frasers.
Looking ahead, the overall hospitality industry will continue to face headwinds in light of the slowing tourist arrivals. New supply could also exert downward pressure on room rates, while occupancy rates may suffer a marginal drop, Teo noted.
However, it would be hard for investors to acquire hotel properties here in the short term as long as high prices persist along with the dearth in supply.
“As with the broader investment market, there is a bit of a price gap at present with vendors under no real pressure to sell, although CBRE does still see some opportunities in the market,” added Teo.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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