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News release

Singapore

JLL: hotel sales in Asia Pacific forecast to grow 15% in 2015 to reach US$8.5bn

Chinese capital will become far more active in hotel investment market globally


  • ​​Global hotel sales forecast to reach an eight-year high of US$65 to US$68 billion in 2015, up 15% on 2014
  • Sales in Asia Pacific forecast to grow 15% to reach US$8.5bn in 2015
  • JLL expects Chinese outbound capital to account for US$5bn – up fivefold on 2014
​SINGAPORE, 27 January 2015 - JLL’s hospitality experts project that global hotel transaction volumes will reach an eight-year high of between US$65 to US$68 billion in 2015, representing a 15 percent increase over 2014 volumes. JLL’s forecast is based on the firm’s 2015 Hotel Investment Outlook, a forward-looking, global analysis that tracks key factors affecting the hotel investment market.  The key drivers of hotel transaction activity globally in 2015 include: strong demand fundamentals, increased liquidity in the debt markets, record levels of single-asset trades, increased portfolio activity in secondary markets and a swell in off-shore capital. 

In Asia Pacific JLL also anticipates a transaction volume increase of 15 percent, which would mean around US$8.5 billion of transactions. There is a growing interest in Japan, in particular for portfolio deals in the country, and a steady confidence in Australia. Indonesia will be a favoured market driven in part by currency plays, and liquidity in China is set to rise as well as policy around outbound capital has been eased and focus increases on cross border investment.

2015: China’s overseas ambition 
United States-based private equity funds and Middle East investors are expected to remain among the top exporters of outbound capital. It is the Chinese, however; who will lead the pack in terms of year-over-year increases in capital deployed. 

Chinese outbound capital experienced unprecedented growth in 2014 driven by the strength of China’s growing economy and appreciating currency. Towards the end of last year China’s Ministry of Commerce relaxed policy restrictions on big-ticket foreign investments and simultaneously loosened the approval process for overseas purchases. This adjustment allows Chinese investors to more easily access key global markets such as New York, San Francisco, London, Paris and Sydney. 

JLL expects Chinese outbound capital to account for US$5 billion in 2015, a five-fold increase on 2014. This places Chinese investors among the ranks of top exporters such as the United States and the Middle East; just a few years ago China did not feature in the top-ten list.

Scott Hetherington, Chief Executive Officer Asia, JLL Hotels and Hospitality Group, commented: "China’s policy change allows numerous investors to compete in international real estate for assets including hotels. We expect this heightened level of activity to become the new norm, and Chinese investors will gain scale in gateway cities.” 
He added: “We believe Japan will be the stand-out market in the region, led by the depreciation of its currency, the availability of stock and operating conditions."

Craig Collins, CEO, JLL Hotels & Hospitality Group, Australasia said: "After a record year of transactional volume in Australia, foreign buyer activity for prime CBD hotels has certainly not slowed, especially with the continued and strong investment interest from China. We also expect metropolitan and regional hotels to remain a major focus of domestic, and increasingly, offshore groups. Australia’s stable government, transparency and growing tourism make it a continued safe haven for buyers."

EMEA and the Americas
The Americas: Transaction volumes in the Americas region will lead the way this year and could reach US$34.5 billion.  Private equity funds are ready to deploy capital and top targets include select service portfolios, resorts and secondary markets. Canada’s hotel market continues its robust performance while Mexico’s liquidity continues to rise due to the traction gained by new REIT-like investment vehicles formed in 2012. Investors are cautiously approaching Brazil’s market, but the northern region of South America has become an investor hot-spot, with Colombia at the helm. In the United States, debt remains readily available and hotel CMBS issuance is back to more than 60 percent of its previous peak. 

EMEA: Activity in Europe, the Middle East and Africa (EMEA) is expected to reach US$24.7 billion. Investment sales activity will be driven by single-asset transactions, led by London and Paris, while portfolio deals are anticipated in the U.K., Germany and Spain. Private equity shops will increasingly look to acquire assets in Southern and emerging European markets in pursuit of higher yields. Middle Eastern outbound capital will remain strong, targeting trophy assets in primary markets. JLL anticipates an uptick in securitized lending as well. 

– ends –

Notes to Editors:
JLL’s Hotels & Hospitality Group serves as the hospitality industry’s global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centres; mixed-use developments and other hospitality properties. The firm’s 320 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world, totalling nearly US$48 billion, while also completing approximately 4,500 advisory, valuation and asset management assignments. The group’s hotels and hospitality specialists provide independent and expert advice to clients, backed by industry-leading research.

For more news, videos and research from JLL’s Hotels & Hospitality Group, please visit: www.jll.com/hospitality, download the Hotels & Hospitality Group app for iOS and Android, or view our e-magazine The Hotel Investor, available for iPad​.

About JLL 
JLL (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $53.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle incorporated. For further information, visit www.jll.com.

JLL has over 50 years of experience in Asia Pacific, with over 29,000 employees operating in 80 offices in 16 countries across the region. The firm was named ‘Best Property Consultancy’ in seven Asia Pacific countries at the International Property Awards Asia Pacific 2014, and won nine Asia Pacific awards in the Euromoney Real Estate Awards 2013. www.jll.com/asiapacific 

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