APAC hotel investments up 14.3% to US$1.6b in Q1

Hotel investment transactions fell 55% to US$7.5b over the last 12 months.

Compared to other commercial real estate classes in Asia Pacific, deals in the hospitality industry remain few and far between, as the hotel sector, unsurprisingly, continues to be the weakest asset class for deal activity. According to Colliers, volume of transactions over the last 12 months was registered at US$7.5 billion, which was a 55% decrease year-on-year. 

Here’s more from Colliers:

Since the start of 2020, we note that circa US$1.5 billion of hotel deals have fallen through. Nevertheless, hotel deals have picked up slightly in Q1 2021 by 14.3% to US$1.6 billion as compared to the last quarter. The most liquid markets were China, Japan and South Korea, while markets such as Malaysia and Thailand saw little investment sales during the quarter. 

While COVID-19 has forced companies to reassess the necessity of business travel, it still appears to be the biggest lifeline for hotel owners in the region. Investors have placed more faith in hotels in urban areas, with transactions of limited-service hotels still higher than 2017 levels. In addition, we note that some hotels have managed to break even with the trickle of business arrivals, while others have signed up as quarantine facilities. 

Although green lanes for business travel have emerged, the development of travel bubbles has been slow. And with government aid drying up, deals in areas such as South Pacific and Southeast Asia have been limited, with owners adopting a wait-and-see approach given the evolving COVID-19 situation.