Global hotel investment booms in 2011
The global hotel market is booming. According to a Jones Lang LaSalle Hotels report, investment in hotel assets in the second quarter of 2011 totalled US$14.8 billion – a 117% year-on-year rise.
Activity in Asia Pacific totalled US$2.6 billion – up 59.0% year-on-year – with the main action taking place in Singapore, China, Japan and Hong Kong. The Americas saw the most significant growth however, registering a 187% year-on-year upsurge in transaction volumes to US$7.4 billion, driven by large single-asset deals in gateway cities like New York. A total of US$4.7 billion in hotel transactions took place in Europe, Middle East and Africa (EMEA) in the first half of 2011, marking an 84% year-on-year increase. Activity accelerated as a result of a marked increase in the number of assets going into administration.
Commenting on the Asia Pacific growth, Scott Hetherington, Jones Lang LaSalle Hotels’ CEO for Asia, said; “Singapore dominated transaction activity in the first half of 2011 with volumes surpassing US$1 billion, reflecting pent up investor demand for the market. We forecasted volumes to total US$2.75 billion in Asia earlier this year and we expect this figure to remain unchanged as growth in countries like Singapore and Thailand is expected to offset decelerated activity in Japan as a result of the March 2011 earthquake.”
In Australasia, deal volume totalled US$478 million with offshore capital sources featuring strongly in the country, accounting for 76% of transaction volumes.
“We expect transaction volumes to reach US$1 billion in Australasia by year-end 2011, which is up from our previous forecast of US$800 million with cross-border investment expected to continue,” said Craig Collins, the company’s CEO for Australasia.
“Despite various natural, economic and political crises witnessed globally in the first few months of 2011, hotel transactions continued gaining momentum and volumes for the full-year are expected to exceed our previous forecast,” said Arthur de Haast, Global CEO for Jones Lang LaSalle Hotels. “We now anticipate full-year numbers to reach US$34.8 billion globally, marking a 28% year-on-year increase.”
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