Strong demand for real estate investments sustained the momentum of transactions going into 2014, with investors competing for quality assets as noted in a new Asia Pacific Hotel Sales & Investment report from international real estate adviser, Savills.
Strong demand for real estate investments sustained the momentum of transactions going into 2014, with investors competing for quality assets as noted in a new Asia Pacific Hotel Sales & Investment report from international real estate adviser, Savills.
The first quarter of the year registered approximately US$2.23 billion worth of investment transactions, representing a 49.8% increase over Q1/2013 (US$1.49 billion).
“We have seen a significant increase in transaction activity by high net worth individuals and the smaller private groups. There is a large pool of funds available for assets in good condition in affluent locations, particularly freehold stock.” said Raymond Clement, managing director of Savills Hotels Asia Pacific.
The report suggests that investors will push more hotels onto the market in 1H/2014, looking to capitalise on improved market sentiment. Institutional buyers, REITs, pension funds and high net worth individuals will continue to view hotel real estate markets as a strong source of uncorrelated returns and positive cash flow, particularly in the developed markets. As one might expect, targeted strategy allocations by investors are reflective of current economic and market opportunities.
Investment activity across the region will remain stable or increase slightly as major global risk factors are seen to be reducing, albeit not yet disappearing. Australia and Japan will again be the major targets for domestic and international investors. In addition, markets such as Viet Nam, Thailand, Indonesia, the Philippines and South Korea will still be on the radar of every developer and opportunistic investor.
Raymond Clement includes, “An investment volume of approximately US$9.0 billion is likely to be achieved in the hotel property market in 2014.”