CBRE research indicates that institutional investors are attracted to hotel assets in Asia Pacific’s tier one markets despite tourist arrivals only reaching 70-80% of pre-pandemic levels in key destinations.

“With limited supply of high-quality assets, investors will likely compete fiercely to acquire the top hotel properties across Asia Pacific,” stated Dr. Henry Chin, Global Head of Investor Thought Leadership & Head of Research Asia Pacific. Despite an uneven tourism recovery across the region, core assets in Japan, Singapore, Australia and Korea as well as resort markets continue to draw strong investor attention.

As of Q3 2023, Asia Pacific hotel investment volumes decreased 29% year-on-year to US$8.44bn; Japan accounting for approximately one-third of this activity. While overall investment activity remains cautious, well-located and high-quality hotel assets in key markets remain attractive investments.

Real estate investors, aware of the long-term potential offered by top-tier hotel properties in Asia Pacific, remain confident about investing in hotels as Chinese travel recovers, according to CBRE estimates. Full recovery may not come until 2024 although destinations like Japan, Korea and Hong Kong SAR have seen increased visitors from mainland China.

“Hotel assets across Asia Pacific have performed exceptionally well in recent months, making them highly sought-after investments,” noted Steve Carroll of CBRE’s Hotels & Hospitality Capital Markets division in Asia Pacific. CBRE anticipates moderate repricing in this part of the world thanks to increased international arrivals and revenue helping to offset headwinds from capital market conditions.