APAC hotel investments surge 46% to US$12.1b in 2021

Hotels have gained appeal as a potential inflation hedge, says CBRE.

The hotel investment segment in Asia Pacific saw a strong recovery in 2021 with a total of US$12.1 billion worth of transactions for the year, reflecting a 46% year-on-year increase.

According to CBRE, this comeback was driven by a growing volume of capital seeking to increase its exposure to the sector.

Buoyed by a steady reopening of borders and easing travel restrictions, investors including REITs, private offices, and a growing volume of private equity are acquiring hotels to upgrade guest offerings in anticipation of pent-up tourist demand, as well as converting some hotel assets into offices and co-living spaces. CBRE believes new opportunities for the hotel industry in Hong Kong are emerging from acquisitions and conversions.

“Hotels are among the sectors poised to benefit as the region’s borders reopen. The sector offers attractive risk-adjusted yields and asset repositioning opportunities to investors seeking enhanced returns. Hotels have gained appeal as a potential inflation hedge due to the sector’s unique short lease period, measured in days rather than months or years as with other property types,” said Steve Carroll, Head of Hotels & Hospitality, Capital Markets, CBRE Asia Pacific.

Click here to view the full report of CBRE Asia Pacific Hotel Market Outlook - Trends to Watch in 2022.