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THE Singapore hotel market attracted robust interest from investors in the first quarter of this year but remained a challenging market for buyers, according to CBRE Hotels.
As a result, there were a limited number of deals in Q1 2015.
"Investors turned more cautious during the period and become more rational and analytical when evaluating potential deals," said CBRE Hotels (Asia Pacific) assistant vice-president Junrong Teo in a report. "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."
A single deal was recorded in Q1 2015, a related-party transaction where Frasers Centrepoint acquired Capri by Frasers at Changi City from Ascendas Frasers for US$148 million.
"The market is (expected) to turn more challenging given the slower tourism growth. New supply will impact room rates and will likely cause a slight drop in occupancy," said Mr Teo. "On the investment side, Singapore will remain a tough market in the short term as high prices and the lack of assets available continue to impede deals."