Chinese capital will become far more active in hotel investment market globally
- Global hotel sales forecast to reach an eight-year high of US$65 to US$68 billion in 2015, up 15% on 2014
- Sales in Asia Pacific forecast to grow 15% to reach US$8.5bn in 2015
- JLL expects Chinese outbound capital to account for US$5bn – up fivefold on 2014
SINGAPORE, 27 January 2015 - JLL’s hospitality experts
project that global hotel transaction volumes will reach an eight-year
high of between US$65 to US$68 billion in 2015, representing a 15
percent increase over 2014 volumes. JLL’s forecast is based on the
firm’s
2015 Hotel Investment Outlook,
a forward-looking, global analysis that tracks key factors affecting
the hotel investment market. The key drivers of hotel transaction
activity globally in 2015 include: strong demand fundamentals, increased
liquidity in the debt markets, record levels of single-asset trades,
increased portfolio activity in secondary markets and a swell in
off-shore capital.
In Asia Pacific JLL
also anticipates a transaction volume increase of 15 percent, which
would mean around US$8.5 billion of transactions. There is a growing
interest in Japan, in particular for portfolio deals in the country, and
a steady confidence in Australia. Indonesia will be a favoured market
driven in part by currency plays, and liquidity in China is set to rise
as well as policy around outbound capital has been eased and focus
increases on cross border investment.
2015: China’s overseas ambition
United
States-based private equity funds and Middle East investors are
expected to remain among the top exporters of outbound capital. It is
the Chinese, however; who will lead the pack in terms of year-over-year
increases in capital deployed.
Chinese
outbound capital experienced unprecedented growth in 2014 driven by the
strength of China’s growing economy and appreciating currency. Towards
the end of last year China’s Ministry of Commerce relaxed policy
restrictions on big-ticket foreign investments and simultaneously
loosened the approval process for overseas purchases. This adjustment
allows Chinese investors to more easily access key global markets such
as New York, San Francisco, London, Paris and Sydney.
JLL
expects Chinese outbound capital to account for US$5 billion in 2015, a
five-fold increase on 2014. This places Chinese investors among the
ranks of top exporters such as the United States and the Middle East;
just a few years ago China did not feature in the top-ten list.
Scott Hetherington,
Chief Executive Officer Asia, JLL Hotels and Hospitality Group,
commented: "China’s policy change allows numerous investors to compete
in international real estate for assets including hotels. We expect this
heightened level of activity to become the new norm, and Chinese
investors will gain scale in gateway cities.”
He added: “We
believe Japan will be the stand-out market in the region, led by the
depreciation of its currency, the availability of stock and operating
conditions."
Craig Collins,
CEO, JLL Hotels & Hospitality Group, Australasia said: "After a
record year of transactional volume in Australia, foreign buyer activity
for prime CBD hotels has certainly not slowed, especially with the
continued and strong investment interest from China. We also expect
metropolitan and regional hotels to remain a major focus of domestic,
and increasingly, offshore groups. Australia’s stable government,
transparency and growing tourism make it a continued safe haven for
buyers."
EMEA and the Americas
The Americas: Transaction
volumes in the Americas region will lead the way this year and could
reach US$34.5 billion. Private equity funds are ready to deploy capital
and top targets include select service portfolios, resorts and
secondary markets. Canada’s hotel market continues its robust
performance while Mexico’s liquidity continues to rise due to the
traction gained by new REIT-like investment vehicles formed in 2012.
Investors are cautiously approaching Brazil’s market, but the northern
region of South America has become an investor hot-spot, with Colombia
at the helm. In the United States, debt remains readily available and
hotel CMBS issuance is back to more than 60 percent of its previous
peak.
EMEA: Activity in
Europe, the Middle East and Africa (EMEA) is expected to reach US$24.7
billion. Investment sales activity will be driven by single-asset
transactions, led by London and Paris, while portfolio deals are
anticipated in the U.K., Germany and Spain. Private equity shops will
increasingly look to acquire assets in Southern and emerging European
markets in pursuit of higher yields. Middle Eastern outbound capital
will remain strong, targeting trophy assets in primary markets. JLL
anticipates an uptick in securitized lending as well.
– ends –
Notes to Editors:
JLL’s Hotels & Hospitality Group
serves as the hospitality industry’s global leader in real estate
services for luxury, upscale, select service and budget hotels;
timeshare and fractional ownership properties; convention centres;
mixed-use developments and other hospitality properties. The firm’s 320
dedicated hotel and hospitality experts partner with investors and
owner/operators around the globe to support and shape investment
strategies that deliver maximum value throughout the entire lifecycle of
an asset. In the last five years, the team completed more transactions
than any other hotels and hospitality real estate advisor in the world,
totalling nearly US$48 billion, while also completing approximately
4,500 advisory, valuation and asset management assignments. The group’s
hotels and hospitality specialists provide independent and expert advice
to clients, backed by industry-leading research.
For
more news, videos and research from JLL’s Hotels & Hospitality
Group, please visit: www.jll.com/hospitality, download the Hotels &
Hospitality Group app for
iOS and
Android, or view our e-magazine The Hotel Investor, available for
iPad.
About JLL
JLL
(NYSE:JLL) is a professional services and investment management firm
offering specialized real estate services to clients seeking increased
value by owning, occupying and investing in real estate. With annual fee
revenue of $4 billion and gross revenue of $4.5 billion, JLL has more
than 200 corporate offices, operates in 75 countries and has a global
workforce of approximately 53,000. On behalf of its clients, the firm
provides management and real estate outsourcing services for a property
portfolio of 3.0 billion square feet, or 280.0 million square meters,
and completed $99.0 billion in sales, acquisitions and finance
transactions in 2013. Its investment management business, LaSalle
Investment Management, has $53.0 billion of real estate assets under
management. JLL is the brand name, and a registered trademark, of Jones
Lang LaSalle incorporated. For further information, visit www.jll.com.
JLL
has over 50 years of experience in Asia Pacific, with over 29,000
employees operating in 80 offices in 16 countries across the region. The
firm was named ‘Best Property Consultancy’ in seven Asia Pacific
countries at the International Property Awards Asia Pacific 2014, and
won nine Asia Pacific awards in the Euromoney Real Estate Awards 2013.
www.jll.com/asiapacific
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