Hotel investments in Asia triple in value in 2013

Hotel investments in Asia soared 218 per cent last year from 2012 to US$7.5 billion, defying industry expectations, figures from property firm JLL show.

This made 2013 the strongest year since 2007, when the volume of transactions reached US$10.3 billion.

JLL expects transaction volume to fall this year because of limited supply, despite strong demand.

Japan, Singapore and mainland China led growth last year, with Japan topping overall investment volumes at US$2.7 billion, up 480 per cent on 2012.

Transaction volume in Singapore hit US$2 billion, more than 10 times the previous year.

Third-ranked China accounted for about 13 per cent of total investment activity, recording US$1.1 billion of transactions, as recent government announcements on improved access to financing drove investor sentiment higher over the second half of the year.

Other markets that experienced strong growth in the region as a result of burgeoning outbound travel from the mainland include Hong Kong (US$486.7 million, up 19 per cent year on year), Thailand (US$337 million, up 31 per cent) and the Maldives, which recorded US$267.6 million in transactions, up 614 per cent on 2012.

Frank Sorgiovanni, vice-president, research and strategic advisory, hotels and hospitality, at JLL predicts Japan, Indochina and the Indian Ocean will account for the majority of transaction volume this year.

Investors were gradually considering emerging hotel markets such as Myanmar and Sri Lanka, where deals would be opportunistic, he said. The Singapore and mainland China markets are also expected to remain strong.