Asia Pacific hotel investments cool in 1H2023: JLL

In Singapore, hotel transaction numbers yielded US$ 30 million in 1H2023, a 95% y-o-y fall. The sale of Parkroyal on Kitchener Road for US$ 388 million, announced by UOL previously this month, is expected to reinforce the sector in the year’s second part. The hotel, found in Little India, was acquired by Midtown Properties, a unit of the Worldwide Hotels Group. JLL advised on the sale.

In the rest of Apac, China additionally observed a drop in hotel financial investment event, by 76% y-o-y to US$ 300 million. In contrast, Japan sustained robust hotel investments, expanding 56% y-o-y to US$ 1.54 billion. In a similar way, hotel investments in Australia as well as New Zealand increased, with volumes climbing 189% y-o-y to US$ 820 million.

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Based upon a study information by JLL, Asia Pacific (Apac) hotel investment volumes dropped by 51% y-o-y in 1H2023, sorted out down by macroeconomic challenges as well as the ascending cost of debt. “Coming off a higher base in 2022 and regardless of helpful market foundations, hotel investments reduced to US$ 3.13 billion ($4.14 billion) in 1H2023 versus US$ 6.41 billion over the very same period in 2022,” the report indicates.

“We have seen the influence of an ongoing disconnect between the sturdy tourism interest plus macroeconomic and geopolitical challenges in the first fifty percent of 2023, causing a space in between sellers’ prices expectations and also buyers’ entry to capital,” claims Nihat Ercan, CHIEF EXECUTIVE OFFICER, Asia Pacific, JLL Hotels & Hospitality Group.

Provided these headwinds, JLL has revised its full-year 2023 forecast for Apac hotel investments to US$ 8.7 billion, down 24% from its initial 2023 price quote.

In spite of the muted financial investment quantities in 1H2023, the firm notes that the hotel industry has presented “considerable enhancement” in trade performance, assisted by rising average day-to-day fees across the area’s hotels and China’s resuming in January this year. “Approaching 2024, we expect to see more certain opportunities surface in some places throughout Apac, where prices have been readjusted downwards, allowing interested parties to reconsider,” Ercan adds.

JLL has advised on 2 other noteworthy hotel transactions just recently. In July, it recommended Crystal Plaza Resorts on the transaction of Amari Havodda Maldives resort to Thai hospitality conglomerate Minor International Public as well as its monetary companion, Abu Dhabi Fund Development. In June, JLL revealed the finalization of Southeast Asia’s very first hotel portfolio sale in 2023– Pullman Jakarta Central Park; and the ibis Saigon South also Capri by Fraser, both in Ho Chi Minh City– for a combined US$ 106.1 million.

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