Thailand's hotel investment transaction volume reached a record ฿17 billion last year, according data from JLL.
This year's transaction volume is not expected to reach 2017's levels because fewer investment-grade hotels are for sale. A list of 12 hotels sold in 2017 have a combined total value of ฿17 billion, up 70 percent from 2016.
"The unprecedented level of activity underlines Thailand as a market with strong investment fundamentals and a positive future outlook, however, with limited availability of investment grade assets on the market, we expect transaction volume in 2018 to taper off somewhat and normalize to around ฿10 billion,” Mike Batchelor, CEO of JLL's Hotels and Hospitality Group, Asia, said in a statement.
Bangkok led the country's investment activity last year, with the highest activity recorded. Six hotels sold for close to ฿14 billion—approximately 80 percent of the total market volume for the year. These included the Edition Bangkok hotel in the MahaNakhon development, which was sold to a U.S.-based private equity fund; a 34-story building on Sukhumvit 27 sold to Singapore's Carlton Hotel Group' a former Premier Inn sold to Singapore's V Hotel Group' the Somerset Lake Point Bangkok sold to Japan's JR Kyushu; the Swissotel Nai Lert Park, which sold to Bangkok Dusit Medical Services; and a serviced apartment complex in Thonglor that was sold to a private investor. Additional sales outside of Bangkok that contributed to the record transaction volume levels included the Dusit Island Resort Chiang Rai, Pilanta Resort on Phi Phi Island and Premier Inn Pattaya in a portfolio sale by V Hotel Group.
Foreign investment also increased last year, representing more than 50 percent of the traded value. Investors from Singapore, Japan and the U.S. had the highest investment activity in 2017.
"Continued growth in visitor arrivals and healthy hotel trading performance supported by a stable political environment are the driving factors behind strong levels of investment in Thailand's hotel market," Batchelor said in a statement.
JLL expects several airport expansions and additions, including the U-Tapao Airport in 2018 and possible future airports in Khao Lak and Hua Hin, will help expand Thailand's visitor capacity. Meanwhile, the Department of Tourism and Sports predicts Thailand will have 37.6 million visitors in 2018, compared to last year's total of more than 35 million.