Vietnam, 3 November 2017 – Hong Kong led Asia Pacific by volume of hotel investment transactions, with 11 deals worth a total of nearly US$1.5 billion in the year to September, according to the latest figures released by JLL. Japan and Thailand saw the second and third highest levels of activity across the region at US$1.2 billion and US$335 million in transaction volumes respectively.
Of the Hong Kong deals, several transactions have potential for conversion into residential or office space. Recently, hotel owners have been considering converting their assets given the strong demand for office space.
“For investors, Hong Kong hotels are appealing because of the discounted rate per square foot when compared to other asset classes, something that has been a factor in some recent transactions. Hotels such as J Plus Hotel has already been purchased for conversation, likely into an office,” says Mike Batchelor, Head of Investment Sales Asia, JLL Hotels & Hospitality Group.
Domestic investors most active in Japan
Japan has remained a stellar performer in terms of hotel investment since 2013, with transaction volumes reaching more than US$1.2 billion as of September 2017. The lead up to the 2020 Tokyo Olympics will continue to boost tourism, with the government aiming to double the number of foreign visitors to 40 million by 2020.
“Domestic investors are traditionally the most active buyers in Japan’s hotel market,” explains Mr Batchelor. “However, we are now witnessing international investors becoming increasingly active in Japan, as market fundamentals continue to improve and it remains one of the most attractive debt markets in the region. We expect a solid last quarter of 2017 in terms of investment activity.”
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