Start of the first quarter of the year with US$2.23 billion worth of investment transaction by two major transactions. The sale of Ginza I Tower, including Hotel Mercure Ginza, in Japan with a transaction volume of US$118.8 Million to Hulic Co,Ltd.
The second transaction was for Sutera Harbour Resort in Kota Kinabalu by Singapore Exchange-listed propert developer GSH Corp Ltd, which acquired a 77.5% stake from Sutera Harbour Resort Group, own by Datuk Edward Ong Han Nam.
The recorded hotel investment volume for Q1/2014 was US$ 439 million. Benchmark transactions were completed by several overseas groups. The acquisition of Germany-based SEB Asset Management for the 14-storey Hotel Alpha-One made a total of US$44.9 million. Hong Kong-based Gaw Capital has recently acquired the 480-room Hyatt Regency Osaka. However, the value of the transaction has not been disclosed.
A significant US$100 million transaction acquired from Red Planet Japan investing for the new 20 hotels over the next six years. A portfolio of nine Comfort Hotels was acquired by Anabuki Kosan from Taisei-Yuraku Real Estate Co, Ltd with a total transaction volume of approximately US$58.4million.
The Singapore-based Ascendas Hospitality Trust(AH-Trust) entered an agreement with Ainodake Godo Kaisha to acquire Namba Washington Hotel Plaza for US$87 million. Genting Singapore Plc, Southeast Asia’s largest casino operator by market value, will develop a casino resort on South Korea’s Jeju Island with a total investment of US$2.2 billion jointly built with Hong Kong listed Chinese property company, Landing International Development Ltd, which will initially target visitors from eastern and northern China. Another casino resort complex will be built and hopefully be open in time for 2018 Winter Olympics in Incheon under the development of Las Vegas based Caesars, Lippo Ltd from Hong Kong and Sinagpore’s OUE Ltd with an estimate cost of US$2.2 billion.
China hotel transactions reached US$612.2 million in Q1, up 75% from the same period last year. A notable transaction was the acquisition of the 666-room Galaxy Hotel in Shanghai by Yangguangxinye from Shanghai Jinjiang International Hotels for a total transaction volume of US$ 208.7 million. Interest in limited service properties was noticeable, with transactions totaling US$17.7 million.
An increase in hotel acquisitions by private buyers and overseas investors was a noteworthy trend in Q1. Despite an downturn in general property market investment, there was a total of three major transactions over US$138 million recorded in Q1, up 276.4% from the same period last year. The most significant deal was the sale of the 55-room Mercer by Kosmopolito by Norwood Asia Ltd, to Ascott Limited for US$ 1.36 million per room. Demand for limited service hotels with a small number of rooms currently dominates the Hong Kong hotel transaction market.
The total transaction volume started to pick up 22.9% compare to the same period last year with US$511.7 million, mainly due to contribution of the sale of the Aman Resort portfolio to the hotel chain’s founder, Adrian Zecha JV Peak Hotels&Resorts Group, by DLF, one of the largest Indian developers.
The portfolio includes a total of ten properties in Indonesia, Thailand and Cambodia, with a total transaction volume of US$150 million, representing approximately 44% of total transaction in Southeast Asia. The acquisition of the 278-room Movenpick Saigon by a Hong Kong-based company from VinaCapital represents an example of overseas inventors’ increasing interest in Viet Nam, due to attractive interest rates and stable exchange rates.
As a result from political unrest in Thailand, total transaction volumes declines by nearly 15.5% in Q1, compared with the same period of last year. Popular destinations such as Phuket and Koh Samui were strong. Several properties in Phuket and Koh Samui are currently on the market or under offer, it is expected that Thailand will record another strong year of transactions in 2014. Royal Group acquired the 215-room Sentosa Singapore (Formerly known as The Beaufort Singapore) from HKR International Ltd for US$166.9million , taking into the account its remaining lease of 60 years.
Six hotel assets were transacted for almost US$259.8 million in the first quarter, with the most notable being the Park Hyatt Melbourne. The 240-room Park Hyatt Melbourne was acquired by Chinese Investor Fu Wah International Group for a transaction price of US$512,466 per room. Also, the 148-room Oaks on Lonsdale was acquired by Hong Kong based hospitality company Ovolo Group for US$422,034 per room. Interest in the sale campaign of Sofitel Wentworth Sydney has reportedly been strong, currently standing at around US$423,283 per room.
We can notice the new hotel developments are picking up by offshore investors acquire hotels on forward commitments as a way to secure assets in a tightly held market. During Q1 the Ritz-Carlton Hotel Company, L.L.C. and Fast Consortium signed an agreement for the development of the Ritz-Carlton, Perth. Starwood also announced the first Australian hotel under the Aloft brand in Perth Riverdale in 2016. There has been a renewed interest of late in the acquisition and development of hotels in New Zealand, particularly in the core cities of Auckland and Wellington..