Hotel investors eye Singapore

Hotel investors eye Singapore

It's a bullish market out there for hotel investments and Singapore is emerging as the darling for investors in a capital-rich environment.

The outlook couldn't be more bullish. The hotel industry is awash with capital looking for homes. The economies in Asia are booming, fuelled mainly by China and, to a lesser degree, India.

At every investment conference, hotel chief executives find it hard-pressed to point out any reason, other than the unforeseen, that could possibly burst the hotel bubble.

At Jones Lang LaSalle Hotels' 10th Asia Pacific Investment Conference held in Singapore in May, the company reported that nearly US$70 billion worth of hotel transactions were registered in 2006, approximately 53% higher than 2005's volume, which was itself a record year - 60% higher than 2004.

Mr Arthur de Hasst: No significant slowdown in sight.Good hotel growth predicted in Asia-Pacific

Asia Pacific enjoyed record growth. JLL estimated that total transaction volume in 2006 was around US$5.25 billion - 73% higher than the previous record posted in 2004 and more than double 2005's levels.

This year, the company is projecting hotel investments in Asia Pacific to get close to US$8 billion. Capital is flowing in from all areas, such as from the Middle East to new sources such as China and India.

"We will not be seeing any significant slowdown in investment activity," predicted Mr Arthur de Hasst, Global CEO of JLL Hotels.

Singapore a favourite amongst hotel investors

And Singapore, which was among the most favoured destinations in 2006, looks set to continue its popularity with investors.

Mr Scott Hetherington, JLL's Managing Director in Asia, said: "We expect to see more transactions in more markets throughout 2007 as investor interest spreads into new markets especially China, India, Vietnam, although Singapore, Hong Kong and Tokyo are expected to remain investment hot spots in 2007."

Hotel investors agree. During a panel during the conference, the top investment funds, when asked to pick their choices for 2007, named Singapore as one of their favoured sites.

The panel of five investors between them accounted for 20% of the US$70 billion in hotel transactions last year.