The APAC regional hotel transaction volume reached USD 14 billion in 2018 (Real Capital Analytics, July 2019), a rise of 23.9% YoY, which is a new record high surpassing the peak level in 2007. China, Japan, Australia, Hong Kong and Singapore all reported steady investment turnover on the back of strong demand from domestic and overseas investors. High transaction volume in China was mainly due to the sale of Dalian Wanda Group’s hotel portfolio of 73 domestic hotels to Guangzhou R&F Properties for circa USD 2.7 billion in H1 2018. Singapore also recorded its highest volume since 2015, led by small, mid and economy tier assets along with boutique shophouse hotels. Turning to 2019, transaction activity has been weak largely due to limited quality assets for sale.
Data points through end of July 2019. Change represents month-over-month change.
REITs and listed vehicles made a great advance in the APAC hotel investment market in 2018, accounting for a 37% share of all hotels traded across APAC, followed by cross-border investors with 23%. Over the past decade, cross border investment accounted for approximately one third to one half of all transaction volume in the APAC hotel sector, while REITs and listed vehicles bought over one fifth of hotels for sale in the region for the same period. Healthy tourism sector fundamentals should ensure the APAC hotel market performs well in 2019, but the lack of quality hotel assets for sale will likely curb transaction activity.
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