Asia-Pacific hotel investment climbs 33% in H1 as recovery continues: JLL
Vivienne Tay
HOTEL investment in Asia-Pacific continued to show signs of recovery, totalling US$6.8 billion in the first half of 2022.
Singapore, particularly, was one of the countries which bounced back the quickest as it was one of the first to lift most travel restrictions in the region, according to real estate professional services firm JLL’s report released on Wednesday (Jul 13).
The Republic raked in close to US$900 million in transaction volumes in the year to date, crossing pre-pandemic levels. Transactions were the most active in the mid-market space, where investors pursued opportunities to convert properties into co-living products, JLL noted.
Regionally, investment volumes were up 33 per cent year on year and 11.9 per cent higher than pre-pandemic levels in 2019.
That being said, the number of transactions fell 20.2 per cent on the year to 75 deals. Compared with H1 2019 numbers, the number of transactions was down 33 per cent.
The total number of rooms transacted in the first 6 months of 2022 climbed around 29.9 per cent year on year to 19,822 and was also 9.4 per cent higher than the pre-pandemic period in 2019.
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“The increase in deal activity was influenced by a spike in portfolio transactions as institutional investors sitting on dry powder seek to deploy their capital more efficiently,” said JLL.
When it comes to investment volume, countries which received the most capital include Japan (US$1.8 billion), South Korea (US$1.7 billion) and Greater China including Hong Kong (US$1.6 billion).
Other than Singapore, which saw US$899.7 million in capital inflows, Maldives (US$205.5 million) and Indonesia (US$159.6 million) continued to recover strongly, JLL said.
Meanwhile, activity in Australia (US$145.5 million) and Thailand (US$37.7 million) was more subdued, but JLL believes these countries will see a boost in H2 2022 as “numerous marque deals” close.
In Thailand particularly, more hotels are entering the market as property owners are under increasing pressure to sell, said JLL. It projects transaction volumes to reach close to US$300 million for FY2022.
“There are numerous private equity funds and family offices currently active in the Thailand hotel market and JLL is seeing an increase in foreign interest with the lifting of travel restrictions,” JLL said.
Despite the rise in deal activity, JLL expects ongoing momentum to see some challenges amid rising macroeconomic and geopolitical headwinds in the second half of 2022.
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