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2013 hotel investment transaction volumes in Asia up 218% year on year


  • 2013 defied market expectations to become strongest year since 2007
  • Singapore, Japan and Mainland China dominated in terms of transaction volumes in 2013
  • Forecasts for 2014 predict continued strong investor demand, but lower volumes traded due to restricted supply

SINGAPORE, 10 March 2014 – Hotel investment volumes in Asia reached USD 7.5 billion at the end of 2013, up 218 percent on 2012 and defying all industry expectations, according to the latest figures from JLL’s Hotels & Hospitality Group​.  This makes 2013 the market’s strongest year post the Global Financial Crisis in 2007, when transaction volumes stood at USD 10.3 billion. JLL forecasts 2014 to be a similarly stand-out year, although transactions volumes are likely to fall on the back of limited supply, despite strong demand.
Singapore, Japan and Mainland China led the region’s growth in 2013 with Japan topping overall investment volumes at USD 2.7 billion, up 480 percent on 2012, as hotel trading performance improved in line with the expansion of the domestic economy and renewed growth in corporate and leisure travel. 
2013 was also a remarkable year for the Singapore hotel market with capital values reaching new records, resulting in transaction volumes of USD 2.0 billion, over ten times that recorded in 2012, predominantly supported by the sale of Grand Park Orchard hotel and Knightsbridge retail, the City’s largest single asset transaction to date. In third place, China accounted for around 13 percent of total investment activity, recording USD 1.1 billion of transactions, as recent government announcements to improve access to financing drove investor sentiment over the second half of 2013.
Other markets that experienced strong growth in the region as a result of improved connectivity and burgeoning outbound travel from Mainland China, include Hong Kong (USD 486.7 million, up 19% y-o-y), Thailand (USD 337.0 million, up 31% y-o-y) and the Maldives, which recorded USD 267.6 million in transaction volumes over the year, up a huge 614 percent on 2012.

Mike Batchelor, Managing Director Investment Sales, Hotels & Hospitality, JLL said, “Strong investor sentiment and, importantly, the availability of quality hotel assets were key reasons behind Asia’s impressive sales volume in 2013 which was hindered only by the availability of additional stock as many owners increasingly hold off selling assets in anticipation of further market growth.  Mature hotel markets such as Singapore continue to be governed by well capitalised, inter-generational investors and as stock becomes increasingly limited, investors are now starting to look further afield once again at new and emerging markets in the region in the search for greater yield and capital growth opportunities.”

“There remains no shortage of capital to be invested into the sector in 2014 (mostly from interregional Asian investors) however improved trading performance and the tightening of cap rates have elevated the expectations of the region’s sellers.  The resulting restricted supply will shape activity this year and, while overall deal flow will remain robust, we expect volumes to moderate in 2014 because of fewer landmark transactions and portfolio deals in the key gateway locations.”

Frank Sorgiovanni, Vice President, Research & Strategic Advisory, Hotels & Hospitality, JLL comments on the markets that will receive most investor attention throughout the year, “Japan, Indochina and the Indian Ocean may account for the majority of transaction volumes in 2014. Investors are gradually considering emerging hotel markets such as Myanmar and Sri Lanka where deals will be opportunistic.  The Singapore and Mainland China markets will also remain strong on the back of robust investor appetite.”

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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 revenue of $4.0 billion, JLL operates in 75 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 3.0 billion square feet and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $47.6 billion of real estate assets under management. 

JLL has over 50 years of experience in Asia Pacific, with over 27,500 employees operating in 80 offices in 15 countries across the region. The firm was named 'Best Property Consultancy' in three Asia Pacific countries at the International Property Awards Asia Pacific 2013, and won nine Asia Pacific awards in the Euromoney Real Estate Awards 2013. 

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