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Asia Pacific hotel investment surges 19% in first half of 2024

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Hotel investment in Asia Pacific reached US$5.7 billion in the first half of 2024, up 19% year-on-year, according to a new report from JLL.

The global real estate consulting firm forecasts total hotel transactions in the region could hit a record US$11.6 billion for the full year 2024, representing 89% of pre-pandemic volumes.

JLL CEO for Asia Pacific Hotels & Hospitality, Nihat Ercan, said the increase in investment aligns with the tourism rebound across the region.

“We’re seeing an uptick in hotel investment volumes in tandem with the tourism boost across Asia Pacific as air travel resumes and seat capacity to Asia Pacific destinations recovers,” Mr Ercan said.

Japan is expected to be the standout market, with hotel investment volume predicted to reach US$4 billion in 2024.

Mr Ercan cited several factors driving Japan’s appeal, including “strong tourism fundaments, the low interest rate environment, a weaker Yen and a shift of focus of Japanese REITs from office to hotels”.

The report found hotel revenue per available room (RevPAR) in Asia Pacific has recovered to 89% of 2019 levels as of June 2024.

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Several countries in the region have implemented visa facilitation schemes to boost inbound tourism, particularly targeting Chinese travellers.

Major events like Taylor Swift and Coldplay concerts, as well as the Rugby Sevens in Hong Kong, have also significantly boosted tourist arrivals.

JLL noted that ESG (Environmental, Social and Governance) considerations are becoming increasingly important for hotel investors in Asia Pacific.

“It’s increasingly obvious to investors that not transitioning to ESG principles will result in brown discounts and a stranded asset in a complex future,” Mr Ercan said.

The firm expects hotel investment activity to be further fuelled by factors such as impending debt maturity, significant available capital, rising capital expenditure needs, and closed-end funds reaching their exit stages.

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