Chinese investors set to increase global hotel acquisitions to 10% by 2017
The latest UK hotels bulletin from international real estate advisor Savills, predicts Chinese investors will increase their share of global cross border hotel acquisitions from the current level of 4% to 10% by 2017. The firm believes that the Asia Pacific regions and the UK, namely London, are set to benefit the most from this growing investment in line with the expansion of overseas Chinese tourism.
According to statistics from Real Capital Analytics (RCA), Chinese investors have spent approximately ?1.6 billion outside of their domestic market over the last five years. Savills predicts there may be further Chinese investment in the form of corporate acquisition as it represents an attractive channel into the UK and European markets. Direct investment into individual hotel assets will increase as the momentum of wider real estate and infrastructure investment continues into the UK and is supported by visitor growth. The firm also states that it has seen a growing number of Hong Kong and Chinese Hotel groups looking to establish their own brands in the UK in order to capitalise on the growth in Chinese visitors.
Giles Furze, associate director of hotel valuation at Savills, comments: ?An increase in Hong Kong and Chinese brands would be an exciting development for the UK market but in the short term we do expect this to be relatively limited due to current levels of Chinese visitors. Major international operating groups will instead continue to develop sub brands suitable for local markets, and will benefit from cross-border group awareness and loyalty.?
Savills reports that Hong Kong and mainland Chinese purchasers have acquired approximately 18 hotels and hotel development sites in the UK over the last five years spending close to ?450 million.? The firm estimates that over the next three years activity by this group could more than double with annual average volumes in excess of ?200 million.
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