China’s hotel transactions lure investors seeking to ride a rebound in tourism as vaccination gathers pace
- Transactions jumped 54 per cent in the first half from a year earlier as JLL sees a return in volume to pre-pandemic levels
- More hospitality assets could come on to the market as cash-strapped developers seek buyers to ease debt burden
The value of hotel transactions amounted to US$1.3 billion in the first six months this year, a 54 per cent jump from the same period a year earlier when the Covid-19 pandemic froze appetite for deals, according to real estate consultancy JLL. China led activity in Asia-Pacific, along with Japan and South Korea, it added.
China’s economy is expected to grow 8.5 per cent this year, according to the World Bank, with most cities managing to beat back the pandemic without any cases for months. The government has vaccinated 40 per cent of its population up to end of June, among the highest rate worldwide, and aims to achieve 70 per cent by the end of 2021.
“We’ve seen huge pent-up travel demand in the post-Covid-19 era,” said Lucia Leung, associate director of research and consultancy for Greater China at Knight Frank. “The bustling domestic tourism [industry] has become an important engine of the recovering hotel market.”
Shanghai continues to be the top investment destination among the 12 hotel transactions tracked by JLL, with the nation’s financial hub contributing one-third of the volume.
Zhongrong International Trust sold its Lanson Place Jinlin Tiandi in Xintiandi shopping neighbourhood for 1.35 billion yuan (US$209 million) in February, while asset manager Jiecheng Capital paid Ascott Residence Trust 1.05 billion yuan for Somerset Xu Hui in Shanghai, a 32-storey service apartment with 168 rooms, in May.