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Jones Lang LaSalle
Asian Hotel Investments
According to the latest data from Jones Lang LaSalle hotel transactions almost doubled in Asia during the first half of this year to reach USD 1.3 billion. That is not only an 85 percent increase compared to the first half of 2012 but is also the strongest first half figure since the first half of 2008.
According to the report the strong performance can be largely attributed to investments in the established tourism markets of Singapore, Hong Kong and Tokyo, with emerging markets in the Maldives as well as Thailand also playing a part. "During the first half of 2013, we have seen a growing number of transactions, including those at the portfolio level, and improved investor sentiment translate to increased sales," Mike Batchelor, managing director investment sales, hotels & hospitality for JLL, said in a report. "The divergence between vendor and purchaser expectations that served to restrict investment activity in 2012, has improved this year leading to a number of landmark transactions in the first half." Broken down we see that 37 percent of regional investments took place in Japan, where strong corporate, tourism and leisure demand is fuelling the sector. Singapore is next down with 34 percent of regional investments, mostly due to the sale of Park Hotel Clarke Quay for USD 238 million. Singapore's recent growth places the country as a key source market for capital hotel investments. According to JLLS, which predicts investment volumes will end the year slightly higher than last year somewhere between USD 2.5 billion and USD 3 billion for the year, funds, institutions and large corporates are the biggest sellers, while REITS, hotel operators and institutional investors are the most active buyers.
"Throughout Asia, we are also aware of circa USD 400 million in hotel transaction volumes to be confirmed soon and a further USD 1 billion in due diligence," Mr. Batchelor said.
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