Blue skies ahead: APAC hotel investment volume hits US$4.7b in H1 2021

Hotel investment demand is expected to grow further in the coming months.

According to CBRE, hotel investment transactions hit US$2.3 billion in the second quarter of 2021, bringing the total transaction value to US$4.7 billion in the first half of the year. A huge chunk of the sales in Q2 were from Japan, China, Korea, and Australia.

In Japan, one of the major deals was Kintetsu Group’s sale of eight hotels (including Hotel Kintetsu Universal City and Miyako Hotel Kyoto Hachijo) to Blackstone for approximately JPY 60 billion. Another landmark deal was the forward purchase of a super luxury hotel, Toko Torch, by Mitsubishi Estate and Tokyo Century for approximately JPY 56 billion.

Meanwhile, in Australia, CBRE reveals Salter Brothers purchased the Travelodge portfolio for AUD 620 million under a joint venture with Singapore’s GIC and Partners Group. The portfolio consists of 11 hotels across Sydney, Melbourne, Brisbane, Perth, and Newcastle which are all expected to be rebranded soon.

“While the pandemic has seen hotel owners having to underwrite lower future trading incomes and discouraged potential investors from entering the market, the recent spate of transactions reflects the fact that this environment has created new opportunities. Well capitalised and experienced investors who are looking beyond the downturn and adopting a longer-term view towards investment returns have been increasingly active in recent months,” says CBRE.

CBRE expects the hotel investment demand to increase in the coming months as end-user demand improves on the back of rising vaccination rates and expectations of an economic recovery.