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Japan seen dominating investment volume for the rest of the year
SINGAPORE, 25 July 2016 - Asia Pacific hotel investment volumes in the first half of this year climbed 13.2 percent to US$3.8 billion compared to the same period last year as yields recovered to pre-global financial crisis levels, according to a report by real estate consultancy JLL.
During the first six months of this year, a total of 14,025 keys traded across the Asia Pacific region, higher than the 10,976 keys achieved over the same period a year ago, according to JLL’s Hotel Investment Highlights report. Japan lent considerable weight to the rankings, representing five out of the top 10 deals transacted during the period. In total, JLL recorded 59 transactions in 11 countries.
“Looking forward, there remains a weight of capital chasing quality real estate assets,” says Mike Batchelor, Managing Director for JLL’s Hotels & Hospitality Group Asia Pacific. “Whilst the investment environment is expected to be dominated by Japan for the remainder of 2016, deal flow should remain robust supported by stronger buying activity in Thailand, Vietnam, Korea and Myanmar.”
The top 10 single-asset transactions in the first six months of this year collectively amounted to almost US$1.7 billion. Japan led with US$2.1 billion, followed by Australia (US$278 million), Mainland China (US$252.6 million), Vietnam (US$237.6 million), Taiwan (US$217.6 million) and Thailand (US$138.3 million).
“Despite the relatively sharp pricing in first-tier cities, there remains significant appetite from investors for deals in markets with strong domestic and international visitation fundamentals,” says Mark Durran, Managing Director, JLL’s Hotels & Hospitality Group in Australasia. “Investors are also expanding their focus to second-tier markets in search of higher yielding opportunities.”
Overall, domestic investors in the region dominated capital flows, accounting for 80 percent of all deals above US$5 million. Australasia continues to attract the highest capital inflows with cross border investors emerging as the dominant purchasers of hotel real estate over recent years.
“Asian buyers continue to be attracted by relatively higher property yields and the safe haven of proven investment markets in Australia and New Zealand. Long term visitor growth from China remains an important investment theme in Australia” says Mr Durran.
“Following Brexit, the weaker British Pound may impact outbound travel from the UK, however, Chinese travelers remain a key contributor to tourism in this part of the world,” continues Mr Batchelor.
Asia Pacific Top 10 Single Asset Transactions first half 2016
1) Grand Pacific Le Daiba, Japan (US$604.7 million)
2) Grand Hi Lai Hotel, Koahsiung, Taiwan (US$190.1 million)*
3) Loisir Hotel Spa Tower Naha, Japan (US$176 million)
4) Urawa Royal Pines Hotel, Japan (US$159.6 million)
5) Westin Resort Guam, Tumon, Guam (US$125 million)
6) Somerset Zhong Guan Cun Beijing, China (US$92.5 million)
7) The Mosaic Collection Grand Pujian Residence, Shanghai, China (US$ 86.4 million)
8) Hotel Route Inn Gotanda, Tokyo, Japan (Confidential)
9) InterContinental Asiana Saigon, Ho Chi Minh City, Vietnam (US$74.9 million)*
10) Hotel Sunroute Shinagawa Seaside, Tokyo, Japan (Confidential)
*Allocated price for the hotel component (excludes the department store)
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Notes to Editors:
JLL’s Hotels & Hospitality Group has completed more transactions than any other hotels and hospitality real estate advisor over the last five years, totalling more than $68 billion worldwide.
Between negotiating the world’s most extraordinary, enticing, and profitable property deals, the group’s 350-strong global team also closed more than 4,400 advisory, valuation and asset management assignments.
Investors worldwide turn to JLL to shape their strategies, tailor their portfolios and maximize the value of their assets. We are recognized as the global leader in real estate services across hospitality properties of all shapes and sizes. Our expert advice is backed by industry-leading research.
We apply our broad spectrum of hotel valuation, brokerage, asset management and consultancy services through every phase of the hotel lifecycle. We have helped more hotel investors, owners and operators achieve high returns on their assets than any other real estate advisor in the world.
Whether you are looking for a hotel or you're ready to sell, we'll use our capital markets expertise, hospitality industry knowledge and global relationships to put the right parties together and execute a bespoke deal that exceeds your objectives.
To find out more, talk to 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. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $58.3 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 33,000 employees operating in 92 offices in 16 countries across the region. The firm won 15 awards at the International Property Awards Asia Pacific in 2016 and was named number one real estate advisor in Asia at the 2015 Euromoney Real Estate Awards. www.ap.jll.com.
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Bee Lin Ang
Associate Director (Content and Communications)