In the first half of 2017, hotel investment in the Asia Pacific region reached $2.9 billion once investors began focusing on key gateway cities, like Hong Kong and Sydney, JLL reported. According to the latest H1 Hotel Investment Highlights Asia Pacific, six of the top 10 biggest hotel asset transactions from January to June 2017 were completed in Hong Kong and Australia. The remaining four took place in Bangkok, Shanghai and Seoul.
“Hong Kong and Australia have been the standout markets in the region in terms of inbound investment, amounting to just under $1.5 billion altogether, driven by robust tourism growth and solid trading performance driving investment activity in Australia,” Frank Sorgiovanni, head of research for JLL’s Asia Pacific Hotels & Hospitality Group, told The Investor.
As tourism increases, Australia is predicted to attract more investment, particularly after a recent influx of significant transactions, including the InterContinental Sydney Double Bay's acquisition for $104 million. That deal was the highest value recorded for a suburban hotel in Sydney.
“Hotel transaction activity is expected to continue in Australia throughout the year given the low interest rate environment, sound economic growth outlook and weaker Australian dollar,” Sorgiovanni said. New hotel projects in Australian cities will boost the country's hospitality industry, including the International Convention Center Sydney, the $244-million expansion of the Art Gallery of New South Wales and an over $38-million redevelopment of the Gumbuya Park near Melbourne.
Vietnam and Cambodia
Although supply in gateway cities around the world is limited, Cambodia and Vietnam's emerging markets continue to attract hotel investors.
“Investors continue to seek alternative investment in Vietnam or Cambodia, where arrivals’ growth is strongly supported by Chinese tourism,” Sorgiovanni said. “We’re particularly bullish about Vietnam’s growing tourism and thriving economy, which has seen foreign investors from across the region attracted to its hotel and resort market over the past 18 months. The country has become one of the most talked-about markets in Asia Pacific.”