SINGAPORE, 18 July 2023: Asia Pacific hotel investment volumes declined by 51% year-on-year in the first half of 2023 as macroeconomic challenges and the rising cost of debt influenced capital deployment.
Coming off a high base in 2022 and despite supportive market fundamentals, hotel investments moderated to USD3.13 billion in the first half versus USD6.41 billion during the same period last year, according to data and analysis by JLL.
Activity during the first half was most robust in Japan (USD1.54 billion) and Australia/New Zealand (USD820 million), which grew by 56% and 189% year-on-year, respectively.
Gateway markets such as Singapore (USD30 million) dropped by 95% year-on-year as the number of transactions declined. However, with the recent sale of PARKROYAL on Kitchener Road for USD388 million, the outlook for the second half of the year will be stronger.
China (USD300 million) also saw activity moderate by 76% year-on-year. Despite strong performance metrics, activity in the resort sector was muted as assets remained tightly held.
“We have observed the impact of a continued disconnect between the robust tourism demand and macroeconomic and geopolitical challenges in the first half of 2023, resulting in a gap between sellers’ pricing expectations and buyers’ access to capital,” says JLL Hotels & Hospitality Group chief executive officer, Asia Pacific Nihat Ercan.
“However, trading performance of the sector remains strong, and other fundamentals, including tourism arrivals and high occupancy rates, provide us with full confidence that the current investment environment is externally-based, rather than industry-specific.”
Source: TTR Weekly
