Commercial & Industrial Property News Update

Asia Pacific - Thailand And Indonesia Emerge As Hottest Hotel Investment Markets


October 10, 2012

Jones Lang LaSalle (JLL) has pegged Thailand and Indonesia as the next hot hotel investment markets in the Asia Pacific.


Investors seeking opportunities in the hotel sector would do well to take note of Thailand and Indonesia. According to Jones Lang LaSalle Hotels (JLL), these two markets are the next hot hotel investment sectors in the Asia Pacific.

JLL, a specialist in hospitality real estate investment services, said that the countries, along with the Maldives, offered the most potential to international hotel investors at the moment.

Tom Oakden, executive vice president of investment sales at JLL said, "We are seeing fantastic potential coming out of Thailand, Indonesia and the Maldives, backed by rising revPAR (revenue per available room), healthy investor interest and solid travel demand.

"While hotel transactions in Asia and globally have slowed in the last year, investor sentiment remains strong for the right prospects, and these the markets that are showing the greatest opportunity for capital value growth."

Despite new hotel supply in Thailand, revPAR is continuing on an upwards trend in Bangkok. Resort markets like Phuket are also showing stronger income growth potential.

JLL added that Thailand, once dominated by domestic investors, is becoming increasingly attractive to overseas players.

"Thailand has seen five major hotel deals in the last 18 months - including the Mövenpick Phuket, which was the country’s largest open market hotel transaction to date," said JLL.

For Indonesia, overseas investors are beginning to venture into other areas besides the traditional markets of Bali and Indonesia.

"Lack of new stock is a challenge, although... research indicates that investors are preparing to sharpen yield expectations. This, coupled with exceptional year-to-date revPAR growth, may well close the gap between the pricing expectations of buyers," said JLL.

Meanwhile, JLL identified the "healthy influx" of mainland Chinese visitors to the Maldives as the driving force behind the island's attractiveness. The nation's relaxed government policies towards overseas investment is also helpful towards foreign investors' plans.

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