Blue skies ahead: APAC hotel investment volume hits US$4.7b in H1 2021

Hotel investment demand is expected to grow further in the coming months.

According to CBRE, hotel investment transactions hit US$2.3 billion in the second quarter of 2021, bringing the total transaction value to US$4.7 billion in the first half of the year. A huge chunk of the sales in Q2 were from Japan, China, Korea, and Australia.

In Japan, one of the major deals was Kintetsu Group’s sale of eight hotels (including Hotel Kintetsu Universal City and Miyako Hotel Kyoto Hachijo) to Blackstone for approximately JPY 60 billion. Another landmark deal was the forward purchase of a super luxury hotel, Toko Torch, by Mitsubishi Estate and Tokyo Century for approximately JPY 56 billion.

Meanwhile, in Australia, CBRE reveals Salter Brothers purchased the Travelodge portfolio for AUD 620 million under a joint venture with Singapore’s GIC and Partners Group. The portfolio consists of 11 hotels across Sydney, Melbourne, Brisbane, Perth, and Newcastle which are all expected to be rebranded soon.

“While the pandemic has seen hotel owners having to underwrite lower future trading incomes and discouraged potential investors from entering the market, the recent spate of transactions reflects the fact that this environment has created new opportunities. Well capitalised and experienced investors who are looking beyond the downturn and adopting a longer-term view towards investment returns have been increasingly active in recent months,” says CBRE.

CBRE expects the hotel investment demand to increase in the coming months as end-user demand improves on the back of rising vaccination rates and expectations of an economic recovery.

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But this is only due to the major sale of Sunworld Dynasty in Q3 2020.
Sales volume reached 1,387 in the first three quarters of 2021.
There are currently 315 hotels with 86,967 keys.
Supply will hit record highs of over 5m sqm this year, with more supply slated until 2023.
There were a total of eight hotel investment transactions during the quarter.
They are mostly in the CBD and CBD Fringe submarkets.
A record 6,000 seats in flex spaces were absorbed in Q3 2021 alone.
Blame it on supply chain disruptions and labour shortages amidst the pandemic.
Damaged land could help address the lack of developable land in Seoul’s Capital Area.
Tenants in Kowloon are favouring lease renewals over relocations.
Full-year investment turnover is predicted to grow by up to 20%.
Transactions already increased by a massive 131.4% y-o-y in the first nine months of 2021.