After a record year in 2019, Q1/2020 saw a sharp fall in investment volumes as a result of the COVID-19 outbreak, hitting a post-2013 low. Despite this, some markets saw an increase in investment activity.
APAC hotel investment volumes slide in Q1
- The total Asia-Pacific hotel investment volume in Q1/2020 stood at US$1.7 billion across 37 transactions, down 43.2% YoY. More than many other industries, the hotel market has been negatively affected by the COVID-19 outbreak.
- Although the overall volume was down, what transaction activity there was continued to be led by the major markets in the region including Japan, South Korea and Australia.
- Despite registering a YoY decrease of 23.7%, Japan dominated Q1/2020 with a deal volume of US$854.5 million across nine transactions.
- South Korea was the second most active market with a total volume of US$391.9 million across eight transactions, up 15.4% YoY.
- Experiencing the highest YoY increase of 114.9%, Australia registered US$125.1 million across ten transactions in Q1/2020.
- Compared to zero transactions recorded over the same period last year, Hong Kong reported two transactions with a total value of US$102.9 million during the first quarter.
COVID-19 outbreak has become a significant disruptor to the world’s economy including the tourism and real estate industries. Both owners and investors are being more cautious despite continuing low-interest-rate environment. However, markets with long-term growth prospects such as Japan, South Korea and Australia are still highly sought-after.”
Savills Research