The number one in hotel investment in Asia Pacific is Hong Kong with current deals at 11 totalling almost $1.5 billion, a report from JLL states. The second spot is given to Japan with activities amounting $1.2 billion. Despite the presence of budget accommodation in Sukhumvit and other hotels, Thailand is still booming.
For Hong Kong, a number of the deals can be converted into projects consisting of office and residential buildings. The last few years saw an increase in hotel owners trying to convert their establishments to office space because of the high demand.
JLL’s head of investment sales in Asia, Mike Batchelor, said that hotels are quite attractive in Hong Kong because of the lower rates in every square foot which is lower than other assets. These purchased hotels are then proposed to be transformed into office space.
It was 2013 when Japan saw an increase in hotel investment and it has continued to remain strong. Transactions until September 2017 have already reached a total of $1.2 billion. Tourism is expected to increase as the Tokyo Olympics in 2020 comes to a close. The government is targeting to have 40 million foreign travellers by that time.
Mr. Batchelor said that the hotel market in Japan is mostly dominated by local investors. Lately, there is an increase in the volume of international investments.
For Thailand, this year is still booming with $335 million investment in the hotel market. Majority of these investments are funnelled in Bangkok. The number is the highest since 2014. JLL played a big role in some of the hotels sold this year with a total selling price of $111.5 million.
The report states that the continued growth of Thailand is due to the stability of the politics government and the fact that hotels are more affordable compared to other countries in Asia. As a matter of fact, it has budget accommodation in Sukhumvit which attracts more travellers. Hotel investments are lower than 22 per cent as a whole in Asia Pacific mainly because of the low supply of hotels on the market.