Apac Investors Signal Intent Buy More Hotel Assets 2025 Cbre
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The Asia Pacific hotel sector is expected to remain a hotbed for investment activity in the coming years, according to a recent survey conducted by CBRE. The 2025 Asia Pacific Hotel Investor Intentions Survey, which was conducted in November and December of last year, revealed that over 72% of hotel investors are planning to increase their purchasing volume this year. Furthermore, 45% of respondents are looking to increase their purchasing volume by more than 10% in 2025.
The survey also found that the rebound in tourist arrivals, particularly in Japan, Singapore, and Australia, has contributed to the positive outlook for hotel investments in the region. This, coupled with the limited supply of hotels, has led to an increase in room rates, allowing for a continuation of income growth for hotel operators.
CBRE’s head of hotels, capital markets, Asia Pacific, Steve Carroll, explains that investors are optimistic about pricing expectations for Apac hotel assets in 2025, following a strong performance over the past 18 months.
Across different types of investors, REITs showed the most significant net buying intentions at 22%. This is a stark contrast to the -13% logged in the previous year’s survey. Carroll states that REITs have indicated a shift to a buying mode in 2025 after several years of negative net investment intentions.
Institutional investors were the second highest in net buying intentions at 12%, followed closely by property funds at 10%. According to CBRE, private equity and real estate funds were more active in 2024, and this momentum is expected to continue into this year.
However, private investors and high-net-worth individuals are expected to drive fewer hotel acquisitions in 2025. After two years of being the most active buyer type in the region, private investors indicate a higher level of selling activity this year. This is due to favorable market sentiment, after acquiring assets during a period of price dislocation.
The survey also revealed that the upscale and upper midscale categories were the most attractive asset types for investment this year, overtaking the upper upscale category that topped last year’s survey. CBRE attributes this shift to the operational flexibility and value-added opportunities of the segment, such as redevelopment and rebranding of existing properties.
Additionally, investors are turning to long-stay or hybrid hospitality models, with a growing appetite for converting assets into co-living spaces. This trend is expected to gain traction in markets like Japan, Hong Kong, and Singapore, where there is a demand for cost-effective accommodation.
Other emerging trends include a preference for assets with vacant possession for greater flexibility in terms of operator selection and refurbishment works. Limited-service hotels also saw higher interest as investors focus on minimizing operational costs.
Tokyo remains the preferred city for hotel investors, followed by Osaka, due to low-interest rates and stable income streams. Other top cities include Singapore and Sydney, which offer solid hotel fundamentals. Seoul also stands out as more visitors from mainland China have driven daily rates, resulting in an increase in investor activity.
Overall, the CBRE survey indicates a positive outlook for hotel investments in Apac for the next few years, driven by favorable market conditions and emerging trends in the hospitality sector.