Friday, June 4, 2010

Asia-Pac pips Americas in hotel sales

Perth, HK and S'pore are ranked highly by investors, says Jones Lang LaSalle Hotels

SALES of hotels in the Asia-Pacific have surpassed that in the Americas for the first time, as investors flock to the region, according to a study.

The Jones Lang LaSalle Hotels (JLLH) report Hotel Investment Highlights shows that the Asia-Pacific chalked up US$3.3 billion of hotel sales last year, outstripping the Americas' US$2.2 billion. The region was also the only one to post growth - 19 per cent.

Transactions in Europe, the Middle East and Africa fell 65 per cent and those in the Americas, 78 per cent.

Sales in the Asia-Pacific are tipped to grow to US$3.7 billion this year - 29 per cent of the US$12.8 billion global total.

'After a year of stagnation, rebounding confidence in the trading outlook has translated into an increase in buy sentiment,' said JLLH managing director for investment sales (Asia) Mike Batchelor.

'Buying is now the most favoured investment strategy across the Asia-Pacific which bodes well for an inevitable impact on pricing as investors compete to secure only a limited number of assets in the second half of the year.'

According to the JLLH report, Asia-Pacific markets ranked highly by investors in hotels include Perth (45.5 per cent), Hong Kong (45.5 per cent) and Singapore (44.4 per cent).

'Hotels in the Asia-Pacific are again in demand,' Mr Batchelor said. 'We expect the overwhelming majority of Asian owners to continue to be the most active hotel buyers in the world.'

While global hotel sales fell sharply in 2008 and 2009, Asia went against the grain, growing 22 per cent in that time. This reflects investor confidence in the region as well as the stronger balance sheets of its individuals and companies during the downturn.

Noteworthy transactions in the past 12 months include local company Keck Seng's purchase of the W San Francisco early last year.

The JLLH study also highlights that previously overlooked segments such as mid-scale and budget hotels are attracting interest among investors, since these segments can offer significant returns.

Source: Business Times, 4 Jun 2010

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