Asia Pacific Hotel Investment Highlights - First Half 2019
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Hotel Investment Highlights Asia Pacific First Half 2019 1
Top 10 Single Asset Transactions
1 Hilton Tokyo Odaiba
Tokyo, Japan
Local Currency USD 6 The Grand Ho Tram Strip
Ho Chi Minh
Local Currency USD
Sale Price JPY 62.4 billion USD 563.5 million City, Vietnam Sale Price Confidential Confidential
453 1,082
Price per Key JPY 137.7 million USD 1.2 million Price per Key Confidential Confidential
keys keys
2 Beijing Jade Palace Hotel
Beijing, China Local Currency USD 7 Conrad Maldives Rangali
Island Ari Atoll
Local Currency USD
Sale Price CNY 2.7 billion USD 402.5 million
Maldives Sale Price Confidential Confidential
151
411 Price per Key Confidential Confidential
Price per Key CNY 6.5 million USD 979,200 keys
keys
3 Ascott Raffles Place
Singapore Local Currency USD 8 ibis Singapore Novena
Singapore Local Currency USD
Sale Price SGD 353.3 million USD 261.4 million Sale Price SGD 170 million USD 125.8 million
146 241
Price per Key SGD 2.4 million USD 1.8 million Price per Key SGD 705,400 USD 522,000
keys keys
4 Radegast Hotel Beijing Bohao
Beijing, China Local Currency USD 9 Finolhu Baa Atoll
Maldives Local Currency USD
Sale Price CNY 1.6 billion USD 242.6 million Sale Price - USD 85.0 million
313 125
Price per Key CNY 5.2 million USD 775,200 Price per Key - USD 680,000
keys keys
5 OneHome Art Hotel Shanghai
Shanghai, China Local Currency USD 10 NEXT Hotel Brisbane
Brisbane, Australia Local Currency USD
Sale Price CNY 1.4 billion USD 210 million Sale Price AUD 104 million USD 72.8 million
319 304
Price per Key CNY 4.4 million USD 658,300 Price per Key AUD 342,100 USD 239,500
keys keys
2 3
Asia Pacific USD 4.5 billion
Total
USD 4.3 billion USD 0.3 billion
Year-To-Date June 2019 Transaction Volume
Asia Australasia
59 hotel sales Asia Pacific USD 384,000
12 countries Average
Price per Key
USD 400,000 USD 236,000
Over 9,000 keys Asia Australasia
4 Note: Numbers may not tally due to rounding 5
Over the past decade, private equity firms and developers 9.3% for the whole of 2018. The majority of deals during
Introduction
have largely been the most active buyer types across the the first half of 2019 were transacted by domestic
Asia Pacific region, consisting of around 37% of the total purchasers, who drove almost 80% of the total capital
transaction volume as at year-to-date June 2019. invested in the region. While REITs were the largest
The REITs and high-net-worth individuals were notably domestic buyers, private equity firms were the biggest
active in the first six months of 2019. Collectively, they cross-border purchasers, comprising about 27% of the
comprised approximately 27% of the total transaction total cross-border volume during the period.
Investment activity in the first half of 2019 remained As investors face continued pressure to deploy capital,
volume as at year-to-date June 2019, as compared to
largely on par with the first half of 2018, with year-to-date it is possible that some investors will adjust their risk
transaction volume for the period totalling USD 4.5 billion. expectations in order to generate their target returns.
As ever, with deal closings being weighted towards the With macroeconomic headlines being dominated by
second half of the year, we expect that the total transaction trade tension between the US and China, uncertainty
volume of 2019 will match, if not exceed, the USD 8.8 did play on investors’ minds as assets in core markets Asia Pacific Transaction Volume by Buyer Type
billion recorded in 2018. remained in vogue for those seeking opportunities in 2008
Asia Pacific to YTD Volume
Transaction June 2019
by Buyer Type
safe-haven destinations. 2008 to YTD June 2019
100%
90%
80%
70%
60%
50%
40%
30%
Asia Pacific Hotel Transaction Volume 20%
2008 to toHotel
Asia Pacific YTDTransaction
June 2019 Volume 10%
2008 to to YTD June 2019
16 0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD June
2019
Private Equity Developer REIT HNWI Hotel / SA Operator Corporates Institutional Investor Others
14
billion)
Source: JLL Hotels and Hospitality Group, Industry Sources
12
Source: JLL Hotels and Hospitality Group, Industry Sources
(USD billion)
Volume (USD
10
8
Volume
6
Transaction
Transaction
4
2
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD June
2019
Japan China Singapore Maldives Australia Taiwan South Korea Hong Kong
Thailand Sri Lanka Vietnam New Zealand Malaysia India Others
Source: JLL Hotels and Hospitality Group, Industry Sources
Source: JLL Hotels and Hospitality Group, Industry Sources
6 7
Domestic Investors most active in Regional Dynamics
Japan and China USD 500 million and total transaction volume across the
Indian Ocean to exceed USD 600 million, in what will be a
Singapore best ever in terms of transaction volume for the region.
As evidenced by strong activities in the land sale market,
Singapore was a notable beneficiary of the flight to safety. Thailand
of the total domestic transaction volume The city-state saw a number of transactions closing or
65%
being announced during the first six months of 2019.
originated from Japan and China Several hotels are currently under private negotiation and A perennially liquid market, Thailand experienced a
we expect the transaction volume in Singapore to exceed reduction in investor activity during the period leading
(Year-to-date June 2019)
USD 800 million by the end of 2019, making it one of Asia’s up to the eventual March 2019 general election, as some
most active investment markets. If achieved, this will investors maintained a wait-and-see attitude despite
be the first time since 2013 when transaction volume in active investor enquiries. With the election now behind,
Singapore will cross the half-billion-dollar mark. Notable we expect an uptick in deal activities in the Kingdom
transactions as at year-to-date June of 2019 include again, as Bangkok continues to be high on the list of key
groups, and properties are available for sale in the major the 241-room ibis Singapore Novena sold for USD 125.8 places to invest for hotel investors. This includes the sale
cities of Tokyo and Osaka, we expect to see investors million, and the 146-room Ascott Raffles Place Singapore of the 268-room Four Points by Sheraton Bangkok
Japan exploring opportunities in smaller cities and resort areas sold for USD 261.4 million. Sukhumvit Soi 15, which was in exclusivity with a Malaysian
which are increasingly benefitting from Japan’s growth in company that has multiple hotel interests in Asia Pacific.
international visitation.
Japan’s hotel market recorded the highest transaction
volume in the first half of the year and it continues to
South Korea
capture strong investor interest. In particular, Japanese Australia
REITs have been very active and accounted for almost half
of the total USD 1.4 billion invested in the Japan market as
China Having firmly established itself as a key regional
investment destination for hotel investors in 2018 Traditionally a hotbed for overseas investors, domestic
at year-to-date June 2019. Benefiting from access to low following a number of headline transactions, South buyers dominated the Australian hotel investment scene
borrowing costs, demand from Japanese institutions is Korea continued to draw investment appetite during in the first half of 2019, comprising around 78% of the total
underpinned by expectations of continued market growth, Despite the ongoing trade tension, China emerged as USD 388.2 million invested. During the period, domestically
the first half of 2019. This includes the recent sale of the
on the back of the incoming wave of large-scale events into the second most liquid market after Japan, with China traded hotel properties included the 304-room NEXT Hotel
224-room Holiday Inn Express Seoul Euljiro, which was
the country, such as the 2019 Rugby World Cup, 2020 Tokyo comprising about 25% of Asia Pacific’s total investment Brisbane sold for around USD 72.8 million; the 169-room
sold for USD 50.7 million - around USD 226,500 per key. It
Olympics and the 2025 World Expo. volume as at year-to-date June 2019. With the domestic Hilton Surfers Paradise sold for USD 49.5 million;
is expected that trading volumes will increase in tandem
economy staying strong, we do not expect the wider trade the 114-room MACq 01 Hotel sold for USD 33.6 million;
In light of the string of upcoming large-scale events in with the increase in trading performance. Moreover, the
headlines to dampen investment activity in the short-term. and the 170-room Mayfair Hotel Adelaide and 69-room
Japan, investors are capitalising on the predicted increase freehold nature of the market, as well as the country’s
continued growth in international visitation, are expected Adabco Boutique Hotel sold to Elanor for around USD
in accommodation demand. In the first half of 2019, the In the first quarter of 2019, internet giant JD.com acquired
to fuel investors’ interest. 70 million. A notable cross-border transaction during
453-room Hilton Tokyo Odaiba Hotel, which is located the 411-room Beijing Jade Palace Hotel for around USD 400
the period included the purchase of the 150-room Felix
within the vicinity of the various event venues of the 2020 million - approximately USD 979,000 per key. The property
by 8hotels at Sydney Airport by Singapore’s Ascott REIT
Olympic Games, was sold for a reported USD 563.5 million is slated to be converted to an office and innovation centre,
for USD 42.4 million, which has since been rebranded as
to Japan Hotel REIT Investment Corporation. continuing the trend which has been witnessed over recent
years where investors seek to extract value from typically
Maldives Citadines Connect Sydney Airport.
During the period, Japan Hotel REIT also purchased the older hotel properties through alternative use.
Hotel Oriental Express Osaka Shinsaibashi for USD 25.2
Conventionally dominated by Asian investors, the Outlook on Investment Sentiment
million, while Hoshino Resorts REIT purchased three As deals continue to be driven by GFA pricing, foreign
investors are likely to be priced out of the hotel market Maldives is now attracting new sources of cross-border Looking ahead, we expect investors to look at the Asia
hotel properties: Hotel Nirakanai Iriomotejima, Hoshino
given the generally low yield profile of transactions. capital from outside of the Asia Pacific region. Two Pacific region to factor into their valuation assumption,
Resorts KAI Alps and Hotel Nikko Kochi Asahi Royal for an
However, foreign investors, particularly owner-operators, transactions have concluded in the first six months of less upside in income; however, with the government bond
estimated total of USD 80.6 million. In the second half of
do continue to seek assets in Tier 1 markets, although it is 2019, namely the 151-room Conrad Maldives Rangali returns looking slim and interest rates potentially falling
2019, at least three hotel transactions valued at more than
likely that market forces and the lack of opportunity will Island which was sold to global private equity firm, during the second half of 2019, there is expected to be a
USD 100 million each are expected to conclude, thereby
push them towards well-performing secondary markets, Blackstone, as well as the 125-room Finolhu Baa Atoll little adjustment in yield expectations across the region.
further boosting the overall investment volume.
such as Xi’an, Chengdu and Suzhou. which was sold for approximately USD 85.0 million to Notwithstanding the more cautious backdrop, the attractive
As hotel investment opportunities in Japan continue German-based Seaside Hotels. There are several other yield profile of the hotel asset class and record levels of
to be hotly contested by both domestic and regional deals in the pipeline and by the end of 2019, we estimate capital on the side-lines are anticipated to drive
transaction activity in the Maldives to reach close to hotel investment momentum in the region.
8 9
Properties for Sale
Patong Heritage Hotel Paul Chakkrit Maduzi Hotel Paul Chakkrit Amilla Fushi Maldives Charlie MacIldowie Commonwealth St Hotel Andrew Langsford
(For Sale or For Lease) +66 89 815 2272 (For Sale or For Lease) +66 89 815 2272 Baa Atoll, Maldives +65 8646 4188 Sydney, Australia +61 422 577 415
Phuket, Thailand chakkrit.chakra@ap.jll.com Bangkok, Thailand chakkrit.chakra@ap.jll.com charlie.macildowie@ap.jll.com andrew.langsford@ap.jll.com
Natai Beach Resort & Spa Paul Chakkrit Regis Bay Hotel Danang Adam Bury
Greater Phuket, Thailand +66 89 815 2272 Danang, Vietnam +65 8313 4600
chakkrit.chakra@ap.jll.com adam.bury@ap.jll.com
10 11
Properties for Sale
Mantra MacArthur Andrew Langsford Abode Hotel Portfolio Mark Durran Midnight Hotel Mark Durran Elysian Retreat, Tom Gibson
Canberra, Australia +61 422 577 415 Canberra, Australia +61 412 248 243 Canberra, Australia +61 412 248 243 Great Barrier Reef +61 437 538 888
andrew.langsford@ap.jll.com mark.durran@ap.jll.com mark.durran@ap.jll.com Great Barrier Reef, Australia tom.gibson@ap.jll.com
Dunk Island, Great Barrier Reef Tom Gibson
Great Barrier Reef, Australia +61 437 538 888
tom.gibson@ap.jll.com
12 13
Major Properties sold by JLL
Felix by 8hotels at Sydney Airport 150 rooms NEXT Hotel Brisbane 304 rooms
(Citadines Connect Sydney USD 42.4 million Brisbane, Australia USD 72.8 million
Airport) Sydney, Australia USD 282,800 per Key USD 239,500 per Key
Koh Yao Yai Land 90 rai Conrad Maldives 151 rooms
(Phuket Long Island) Sale Price Confidential
Rangali Island Sale Price Confidential
Greater Phuket, Thailand South Ari Atoll, Maldives
Finolhu Maldives 125 rooms MACq 01 114 rooms NEXT Hotel Melbourne 255 rooms
Baa Atoll, Maldives USD 85.0 million Hobart, Australia USD 33.6 million Melbourne, Australia Sale Price Confidential
USD 680,000 per Key USD 294,700 per Key
14 15
Contact Us to Achieve your
Hotel Ambitions
Asia
Singapore Office
Mike Batchelor Nihat Ercan Adam Bury Charlie Macildowie
Chief Executive Officer, Asia Managing Director Senior Vice President Vice President
mike.batchelor@ap.jll.com Investment Sales, Asia Investment Sales, Asia Investment Sales, Asia
nihat.ercan@ap.jll.com adam.bury@ap.jll.com charlie.macildowie@ap.jll.com
Japan Office
Tom Sawayanagi Yasokazu Terada
Senior Managing Director Managing Director
Investment Sales, Japan Investment Sales, Japan
tom.sawayanagi@ap.jll.com yasokazu.terada@ap.jll.com
Hong Kong Office Thailand Office China Office
Corey Hamabata Paul Chakkrit Ling Wei Tan
Senior Vice President Senior Vice President Vice President
Investment Sales, Asia Investment Sales, Thailand Investment Sales, China
corey.hamabata@ap.jll.com chakkrit.chakra@ap.jll.com lingwei.tan@ap.jll.com
Australasia
Sydney Office
Craig Collins Mark Durran Andrew Langsford
Chief Executive Officer, Managing Director Senior Vice President
Australasia Investment Sales, Australasia Investment Sales, Australasia
craig.collins@ap.jll.com mark.durran@ap.jll.com andrew.langsford@ap.jll.com
Melbourne Office Brisbane Office New Zealand Office
Peter Harper Tom Gibson Nick Thompson
Executive Vice President Senior Vice President Vice President
Investment Sales, Australasia Investment Sales, Australasia Investment Sales, Australasia
peter.harper@ap.jll.com tom.gibson@ap.jll.com nick.thompson@ap.jll.com
jll.com
© Copyright 2019 JLL. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating
this proposal. All such documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is
authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information
16
contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof.
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