Asian hotel sales reached record high in 2007
Thursday, 31st January 2008
Source : Jones Lang LaSalle Hotels
Hotel transaction activity in Asia reached US$10.8 billion during 2007- more than double the previous high of US$5.0 billion recorded in 2006. 

During 2007, the Asian hotel market witnessed 83 major (valued above US$5 million) transactions.  Japan recorded the highest transaction activity totalling US$6.8 billion; including four out of the five largest transactions including the IHG / ANA portfolio sold by Jones Lang LaSalle Hotels. 

"Asia's hotel markets continue to perform well, driven by strong local economies and expanding leisure markets," said Mr Scott Hetherington, Managing Director Asia, Jones Lang LaSalle Hotels.

On average, investors paid approximately US$225,000 per room for hotels across Asia.  "Reflective of a higher level of product being offered for sale throughout the year, this was a 15.3% increase over 2006 and the highest level recorded since 1997," said Mr Craig Collins, Managing Director Investment Sales Asia, Jones Lang LaSalle Hotels.

While regional players still dominate, cross-border transactions have also increased accounting for 46% of total hotel transaction activity – a significant increase on last year's 39% (+US$3 billion).  Investors remain bullish on expectations for short and medium term trading across Asia Pacific. 

"Continued urbanisation and development in Asia has the potential to drive economic growth for many years to come and while many forecasts suggest a slowdown in the US, developing Asia is perceived to be relatively protected from this," said Mr Hetherington.  Capital inflows in 2007 were dominated by U.S. private equity groups, as well as Middle Eastern investors.

"Prospects for greater transaction volumes were restricted by the limited number of hotel assets for sale," said Mr Hetherington.  With such positive hotel trading conditions, many investors are adopting a hold strategy.  "In our latest Hotel Investor Sentiment Survey, buyers still outweigh sellers by 5:1 with buy sentiment prevailing in over half of surveyed markets, dominated by the regional investment hot spots of China, Japan and Singapore."
"Most countries across Asia witnessed transaction activity, however deals were concentrated in North Asia, namely Japan, Hong Kong, China and Macao," said Mr Hetherington.  "Vietnam is also attracting unparalleled levels of interest," he added.  "Markets tipped hot for acquisition by investors include Macao, Hong Kong, Guangzhou, Chengdu, Beijing, Tokyo, Osaka, Singapore, Shanghai and Ho Chi Minh City," 

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