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SG Asia hotel investments up 145%

Property Here - Wednesday, October 02, 2013

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Hotel investment volumes in Asia increased 145 percent year-on-year to reach US$3.9 billion (S$4.9 billion) this year as of end-Q3, noted a report from Jones Lang LaSalle's Hotels & Hospitality Group. 

In the third quarter alone, the market recorded US$1.2 billion (S$1.5 billion) of transactions, or a growth of 41 percent over the same period last year. 

The overall sense of optimism in hotel investment is due to rising tourism across the region, with Singapore and Japan driving the robust activity. The Singapore investment market accounted for 16 percent of year-to-date transaction volumes. Given its consistently high tourist arrivals and occupancy rate, the city-state continues to see strong demand from foreign investors. 

“Hotel trading performance in Asia has experienced a significant turnaround over the past two years and nowhere more so than in Singapore. This quarter’s landmark transaction of the Grand Park Orchard Hotel and adjoining Knightsbridge retail podium heralded the single largest asset deal in the city’s history. Going forward, we are aware of approximately US$1.3 billion (S$1.6 billion) in exchanged contracts that will contribute to a very strong pipeline over the remainder of the year,” said Mike Batchelor, Managing Director of Investment Sales, Hotels & Hospitality, Jones Lang LaSalle.

With investor confidence in Asia rallying, the availability of investment grade hotels is becoming scarce. Thus, buyers look to markets such as Thailand, Maldives and the Seychelles.

“While the market is beginning to feel some restriction from a limited pipeline of hotel listings, the unrelenting strength of demand across both private and institutional investors will ensure that transaction volumes remain healthy. Given the volume of hotel deals that are due to settle before year-end, we are increasing our regional full year total sales projection from US$3.5 billion (S$4.4 billion) to US$5.5 billion (S$6.9 billion), confirming 2013 as the strongest year since 2008,” Batchelor added.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg