The total value of Asia Pacific investment sales surged 151.1 percent to
US$2.77 billion (S$3.46 billion) in Q3 2013 from US$1.10 billion
(S$1.37 billion) in the same period last year, according to Savills
Research.
Japan, Australia and Singapore emerged as the top three
markets, accounting for 83 percent of the overall investment volume of
the 15 countries surveyed.
“Hotel room supply is growing across
Asia Pacific, resulting in more investment opportunities and driving
volumes, especially in markets where unbranded hotels are not readily
available. However, with only a few hotels being launched over the last
few years in key cities, pricing has remained aggressive, with investors
competing for any available assets,” noted Savills.
According to
the report, most of the investors are still searching for prime
opportunities across all market segments. But the lack of core
investment opportunities in Bangkok, Seoul and Hong Kong resulted to
very limited transactions in Q3.
“The prime yield differential
between core and secondary markets has started to narrow, mainly led by
yield compression in Singapore and Tokyo. The average yield in our area
is between 3.5 percent and 4.5 percent for prime hotels, and between 7.0
percent and 9.0 percent for prime resort hotels,” it added.
Going
forward, South Korea, Singapore and Japan are expected to witness
double digit investment volume growth, while Thailand, China and Hong
Kong are expected to see decreases, primarily due to scarcity of prime
products.
Overall, prime yield levels will likely remain stable, with improving investor confidence in the secondary markets.
“We
predict that prime yields may harden further in Singapore, Japan and
Thailand, while we do not expect any major changes elsewhere until the
end of 2013,” Savills noted.
Nikki De Guzman, Junior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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