Entering 2020, the outbreak of Coronavirus inevitably sends short-term shockwaves through the hotel investment market, in particular China, but investors are expected to remain confident in the hospitality sector in the long-term, says JLL.
The latest data from JLL reveals that global hotel transaction volumes in 2019 reached USD 66 billion, bolstered by a resilient global economy, strong employment markets and demand from domestic and international travelers.
Hotel transaction volumes in Asia Pacific totaled USD 12.7 billion in 2019 that led to a 44% increase relative to 2018, exceeding previous projections of a 25-30% increase. This marks the second time that regional hotel transactions surpassed the USD 12 billion mark. The region’s remarkable performance was supported by several high profile deals, including the 615-room Grand Hyatt Seoul, which sold for USD 481 million and the 342-room Andaz Singapore, which sold for USD 344 million, the highest single asset transaction in the country’s history.
China emerged as the third most liquid hotel transaction market after Japan and Singapore, recording approximately USD 1.4 billion in transaction or 11% of Asia Pacific’s total hotel investment volume. Investment trends in 2019 continued to mirror those seen in previous years where older hotel properties were purchased with the intention to convert them to alternative uses, for example, the acquisition of Beijing Jade Palace Hotel by JD.com which is said to be converted to office and R&D facility.
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