Despite tourist arrivals in key Asian Pacific destinations only achieving 70-80% of pre-pandemic figures, institutional investors are showing keen interest in prime hotel assets in top-tier markets, according to recent research by CBRE.
Dr. Henry Chin, Global Head of Investor Thought Leadership & Head of Research, Asia Pacific, mentioned, “Despite the uneven tourism rebound, core assets in countries like Japan, Singapore, Australia, and Korea are garnering significant attention.”
By Q3 2023, the hotel investment volume in the Asia Pacific had decreased by 29% year-over-year, reaching US$8.44bn, with Japan representing around a third of this activity. Even with the cautious investment environment, prime hotel assets in strategic locations continue to appeal to investors.
The delayed return of travelers, especially from mainland China, hasn’t dissuaded real estate investors who see the enduring value of top-tier hotel properties in the region.
CBRE predicts a complete recovery in Chinese travel by the end of 2024, but some places, including Japan, Korea, and Hong Kong SAR, are already experiencing an upswing in visitors from mainland China.
Steve Carroll, Head of Hotels & Hospitality, Capital Markets, Asia Pacific for CBRE, commented on the robust performance of Asia Pacific hotel assets, indicating their increasing desirability among investors.