Hotel Investment in Asia Pacific Reaches US $ 4.5 Billion in First Semester 2020. According to global real estate consultant Jones Lang LaSalle (JLL), investment in the hotel business reached US $ 4.5 billion in the first six months of 2019. More than half of the investment value came from local buyers in Japan, China and Australia.
According to JLL’s latest report titled “Hotel Investment Highlights”, investors face increasing challenges in making investment decisions amid geopolitical uncertainty. To achieve the return target, a number of investors have evaluated risk expectations in order to seize opportunities in their respective countries.
Hotel Investment in Asia Pacific recorded the highest volume of domestic transactions
The hotel business in Japan recorded the highest volume of domestic transactions in the Asia Pacific region at US $ 1.14 billion during the first six months of 2019. Of this, REITs accounted for nearly half of the total value invested in the market. All of this comes from a number of business deals, including the acquisition of Hilton Tokyo Odaiba worth US $ 563.5 million by Japan Hotel REIT Investment Corporation and the purchase of Hotel Oriental Express Osaka Shinsaibashi for US $ 25.2 million.
Demand from Japanese institutional investors is growing due to low borrowing costs and expectations of sustainable market growth which are underpinned by large-scale events to be held in the country, such as the 2019 Rugby World Cup, Tokyo 2020 and 2025 World Expo, said Mike Batchelor. , CEO of Asia, JLL Hotels & Hospitality in written information obtained in Jakarta.
We believe that the 12 percent increase in forecast for international visitors to Japan in 2019 will continue to spur local investors to explore hotel business opportunities in big cities such as Tokyo and Osaka during the rest of the year, he added.
Hotel Investment in Asia Pacific will be converted into a multi-purpose office at the end of the year
Following in second place as the market with the largest trading volume in the region is China, which recorded a domestic investment volume of US $ 1.1 billion. In the first quarter of 2019, local internet giant JD.com bought the Beijing Jade Palace for US $ 400 million. The hotel will be converted into a multi-purpose office at the end of the year.
Batchelor said the deal was part of a series of domestic investments targeting hotel assets to be used as alternative facilities such as offices. By calculating the price per square meter in China, hotel assets tend to be worth less than other commercial properties. Given the low yield profile of these transactions, foreign investors are likely to exit the hotel market leading to more domestic transactions in China.
Domestic investors dominated the hotel sector in Australia in the first half of 2019. This sector has long been the target of foreign investors. With an investment value of nearly 80 percent of the total value of US $ 388.2 million, targeted domestic hotels include the NEXT Hotel Brisbane, Hilton Surfers Paradise, MACq 01 Hotel, and the Mayfair Hotel Adelaide.
The area, location and type of assets offered in the first half are in accordance with the wishes of local investors, that’s why they are so dominant. From 2018 to June 2019, Australian investors tripled their investment in the hotel sector,” said Craig Collins. , CEO of Australasia, JLL Hotels & Hospitality.
Meanwhile, domestic investors continue to be very active. The Australian hotel investment market remains a strong focus for foreign investors. Based on projected transaction activity for the second half of 2019, we estimate that international capital will dominate hotel acquisitions for the rest of the year, Mr. Collins concluded.
Indonesia currently ranked third in Asia in terms of hotel development
Indonesia is currently ranked third in Asia in terms of hotel development. This is a fact that we are in demand for investment purposes in the hospitality sector, although not the only one, Indonesia is currently one of the main investment destinations for hotels and restaurants favored by investors.
He noted that in 2012, the total foreign investment (PMA) and domestic investment (PMDN) for hotels and restaurants reached US $ 869.8 million. That number increased significantly or reached 210% compared to 2011. Let’s hope that the high interest in building hotels must be accompanied by effective and efficient environmental hotel management. The government encourages hotel investors who wish to invest in Indonesia to apply the green hotel concept. The concept of a green hotel in question is based on efforts to optimize resources (energy, water, and materials) and manage space in hotel buildings that meet the quality of comfort and health for the humans in it.
Benefits of Being a Property Hotel Investor
As an investor, you can enjoy all the facilities in the hotel and you can enjoy these facilities for free without spending money. Of course this is an advantage for you. Therefore, if you want to stay at a hotel for free, invest in the world of hospitality.
Another advantage of this investment is that the unit price can increase. And the increase in the unit price itself could reach 20% or even more. Those are some of the advantages if you are investing in hotel property. However, there are many more advantages and advantages of this one investment. But before you really start investing in this hotel or condotel, there are several things that should be considered.