Investor sentiment for Asia Pacific hotel assets remains robust in 2013 with Mumbai and Delhi appearing among top 10 destinations for development opportunities.

Consultancy Jones Lang LaSalle in its 2013 Hotel Investment Outlook states in Asia Pacific hotel transaction volumes are projected to reach $3.5 billion in 2013 on the back of strong investment sentiment to buy hotel assets in the region.

Investment benchmarks are being established in India. The dynamics in 2013 will favour both buyers and developers with a slowdown in development activity and more opportunities to acquire, the report observes.

Scott Hetherington, CEO, Jones Lang LaSalle Hotels and Hospitality Asia said: "While we are seeing strong investor appetite, sell intentions in Asia Pacific are the lowest of all the regions. This is attributed to a softening of yield and leveraged initial rate of return expectations."

Consequently, transactions of existing assets are expected to be broadly consistent with 2012 and pick up in 2014.

This projection represents an improvement on 2012 volumes, where hotel sales activity dropped 30 per cent on the previous year to $3.3 billion.

More investors will look to acquire or develop Asia Pacific hotel assets in 2013 as they seek to secure a foothold in the region. Asia Pacific hotel markets continue to rank among the highest globally for development sentiment, with Bali, New Delhi and Mumbai appearing in the global top ten.

Despite strong investor sentiment, a low level of established product for sale is expected to widen the pricing gap between buyers and sellers and slow the pace of transaction volumes.

Hotel supply in Asia is projected to increase across 23 major markets over the next two years.

>rishikumar.vundi@thehindu.co.in

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