The total global value of hotel investments will reach US$32 billion in 2013 – the highest level since 2007.
This is the latest forecast from Jones Lang LaSalle (JLL), which, ahead of the release of its annual Hotel Investment Outlook, said that “increased transparency” would give way to greater opportunities for international investment. As such, cross-border capital, which accounted for 30% of global hotel investment in 2012, is expected to accelerate in 2013.
“Inadvertent hotel owners, like banks and receivers, will continue to drive a significant share of hotel product to market. We also expect institutional investors to liquidate select non-core assets that will create opportunities for value-add investors,” said Mark Wynne-Smith, global CEO of JLL’s Hotels & Hospitality Group. “While buyers have indicated a greater intent to purchase in 2013, the global economic uncertainty will keep a ceiling on transaction volumes.”
Private equity investors are expected to continue to lead hotel investments in 2013, while real estate investment trusts (REITs) will make “headline acquisitions of core properties in gateway markets”, according to JLL. This is especially likely in Asia Pacific where two new hotel REITs in Singapore have been listed.
In terms of hotel operations, JLL said that the “fundamentals are generally holding strong”, with the world’s gateway and resource-rich cities leading growth in terms of revenue per available room (revPAR). Markets identified by JLL as driving global growth including Istanbul, Munich, San Francisco, Boston, Sydney and Singapore.