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Global hotel transaction volumes at highest level since 2007
Sydney, 7 November 2013 - Global hotel investment volumes in the first three quarters of 2013 have reached the highest level since 2007. At US$32.2 billion, it represents a 51% increase over the same period last year.
Jones Lang LaSalle's Hotels & Hospitality Group's Chief Executive Officer – Australasia, Craig Collins said, "At the beginning of the year, we anticipated global hotel market liquidity to total US$33 billion for the full-year. However, having nearly achieved our initial forecast already, and with further growth expected to occur into the typically strong final quarter of the year, hotel transactional volumes are likely to exceed our initial expectations by at least 10% to15% at least."
According to Jones Lang LaSalle, robust growth was registered across all global regions in the third quarter of 2013. While investment activity focussed primarily in major country markets, there was evidence of greater risk appetite through increasing activity in more opportunistic regional locations and secondary assets in larger cities.
Hotel investment volumes in the Asia Pacific region for the year-to-date are at US$5.1 billion, representing year-on-year growth of 61% in 2013. Heightened investment activity in Singapore, China and Japan have accounted for more than half of this volume.
Mr Collins commented, "Asia Pacific hotels are experiencing the strongest year in terms of transaction volumes since the Global Financial Crisis. This activity is fuelling an overall sense of optimism across the region and driving price benchmarks above their 2007 peaks."
The sale of Grand Park Orchard Hotel and Knightsbridge Retail Podium in August at circa SG$1.15 billion (AU$1 billion) was the largest single commercial property transaction in Singapore's history.
Australian transaction volumes in 2013 received a significant boost with the sale of the trophy Four Seasons Hotel Sydney (at AU$340 million) being the largest single asset hotel transaction ever achieved in Australia, along with the sale of the 31 hotel TAHL Australian Portfolio.
Year-to-date transactions in Australia have topped AU$1.6 billion. Our current forecast is for the market to reach AU$1.9 billion before the year end. If achieved this will represent the highest transaction volume year on record for Australian hotels.
"Australia continues to be a very active market following a number of major deals throughout the country during 2013. Sydney remains the focus of offshore interests accounting for almost 50% of the total number of hotel rooms transacted so far this year. With the continued focus of international investors on Australia, we are expecting this momentum to continue into 2014," concluded Mr Collins.
CEO - Australasia Hotels & Hospitality Group
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