Investments in Hong Kong hotel properties look set to intensify amid a growing number of hotel-backed real estate investment trusts (reits) coming to market, a top consultant says.
The planned listing of Far East Consortium International's 10-hotel portfolio in a reit to raise up to HK$3 billion in the third quarter of this year would pump further liquidity into the market after Hong Kong's first hotel property trust, Regal Reit, went public for HK$5.9 billion in March, said Tom Oakden, a senior vice-president of investment sales in Asia at Jones Lang LaSalle Hotels.
The Hong Kong hotel property market recorded its first deal this year with the HK$1.6 billion sale of Majestic Hotel and its shopping centre in Jordan by a Lai Sun Development-led alliance to an investment fund, Jones Lang LaSalle Hotels Management, Mr Oakden said.
'Hong Kong is a hot market for hotel investments,' he said. 'Hotel owners hold on to their assets tightly while sophisticated investors are looking for acquisitions. When there are assets available in the market, buying interest becomes strong and pricing gets aggressive, too.'
Mr Oakden said that investment funds such as Kingdom Holding of the Middle East, Carlyle Group of the United States and Morgan Stanley were leading shoppers of hotel assets in the Asia-Pacific last year.
Transaction volume in the region was estimated to hit US$8 billion this year, he said.
