China, Japan will drive hotel investment
By Ding Qingfen (China Daily)Updated: 2007-06-05 09:17
Hotel investments will rise in Asia this year and China will be the driving force along with Japan, says Scott Hetherington, managing director of Jones Lang LaSalle Hotels.
According to the latest report of the hotel investment services firm, the global hotel transaction volume reached a historical peak in 2006, surpassing $72 billion, since 2002, when the global market began to recover from its lowest point.
Although America and Europe are the two major regions where the transactions have been and will continue to be the highest, "Asia-Pacific would enjoy the highest growth by volume of transactions this year," said Arthur de Haast, global CEO of Jones Lang.
"This year, the global volume will slightly fall to less than $70 billion.
America would be flat, Europe, decrease, and Asia, accelerate," he predicted.
China is already seeing a lot of action on the hotel investment front, said Hetherington.
And the coming Olympics is acting as the catalyst. Ever since Beijing was chosen as the next Olympics venue, hotel investments have picked up rapidly in China.
Despite the restrictions introduced in mid-2006 by the government on acquisition and funding of real estate investments by foreign entities on the mainland, investors look anything but discouraged.
The number of deals in 2006 crossed 16 and the hotel transaction volume exceeded $1 billion, which is over one-sixth of the total volume in the whole of Asia.
Under the new policies, foreign investors are required to have at least 50 percent of the total investment in registered capital, up from the previous 33.3 percent, for investments over $30 million.
In line with previous years, sellers were private individuals, State-owned enterprises as well as Japanese and Singaporean owners. Buyers were a mix of private equities, owner-operators, venture funds and real estate investment trusts, the majority of which are based in the Asia-Pacific region.
There will be strong investor demand across the mid- and upper-scale hotels
in big cities like Beijing and Shanghai and strategic secondary locations, said
Andreas Flaig, executive vice-president Jones Lang and head of its China
business .
| 1 | 2 |  |
(For more biz stories, please visit Industry Updates)