Performance of Asia Pacific hotel investment markets
The recent Pan-European hotels investment performance figures from IPD demonstrate the resilience of European hotel investments in what has been a tough economic climate, and a similar level of outperformance can be seen in the Asia Pacific region.
The IPD Asia Pacific Hotel Investment Report, released last week and sponsored by Jones Lang LaSalle and Ryan Lawyers, showed an 11.1% total return for 2012. The index is underpinned by 179 corporate hotels valued at US $12.5bn, spanning Australia, Hong Kong, Japan, Singapore, China, Malaysia, New Zealand, South Korea, Taiwan and Thailand.
Like most markets, investment in hotels took a hit after the global financial crisis, but has recovered strongly in the years since.
Across the Asia Pacific region, hotels have delivered higher returns than office, retail and industrial sectors for the last three years, to March 2013. Investor demand remains strong, with volumes up by 85% and an estimated further US $1.1 billion in the pipeline, according to Jones Lang LaSalle.
Hong Kong continues to be the strongest market, with a total return of 23.0% for 2012. Investment returns delivered by other countries include 9.5% for Australia, 5.5% for Japan, and 6.0% for Singapore.
Hotels have less volatile investment characteristics than other sectors, and are expected to continue to offer healthy returns throughout the Asia Pacific region over the course of 2013.
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