Apac Investors Signal Intent Buy More Hotel Assets 2025 Cbre
The Asia Pacific (Apac) hotel sector is poised to experience a continued surge in investment activity until 2025, based on a recent survey conducted by CBRE. The consultancy’s 2025 Asia Pacific Hotel Investor Intentions Survey, held in November and December last year, revealed that over 72% of hotel investors surveyed have expressed their plans to acquire more hotel assets in the current year.
Around 45% of the respondents have revealed intentions to increase their purchasing volume by more than 10% this year. Steve Carroll, Head of Hotels, Capital Markets, Asia Pacific at CBRE, stated, “After performing exceptionally well over the past 18 months, investors are confident about the optimistic pricing expectations of hotel and living assets in Apac in 2025.”
According to the survey, the healthy buying intentions are fueled by a boost in tourist arrivals, especially in areas like Japan, Singapore, and Australia. Carroll added that the increase in international arrivals from key markets has led to a rise in Apac hotel room rates, ensuring continued growth in income for hotel operators, as seen last year.
The survey also noted the limited hotel supply in Apac as an encouraging factor for investors. Based on data by STR, a hospitality data intelligence group, CBRE pointed out that the number of hotel rooms in Apac is projected to grow at a Compound Annual Growth Rate (CAGR) of 2.2% between 2024 and 2028, which is significantly lower than the 5% CAGR recorded between 2013 and 2023.
A breakdown of investment intentions by investor type showed a significant net buying intention among Real Estate Investment Trusts (REITs) at 22%. This marks a notable contrast from last year’s survey, which recorded -13%. “After several years of reporting negative net investment intentions, REITs have indicated their plans to acquire more assets in 2025,” the report stated.
Institutional investors followed closely with a net buying intention of 12%, and property funds at 10%. CBRE also observed an increase in activity from private equity and real estate funds for hotels in 2024, with the momentum expected to continue this year. However, private investors and high-net-worth individuals are expected to be less active in acquiring hotel assets, with a higher level of selling activity projected in 2025. This trend is attributed to the desire to capitalize on the improving market sentiment after purchasing assets during a period of price dislocation.
Upscale and upper midscale assets emerged as the preferred investment strategy for 2025. According to CBRE, in select markets, assets have been repriced to a level where investors believe they can achieve value-add returns by acquiring assets that reflect core risk profiles. Hence, the upscale and upper midscale hotel categories have surpassed the upper upscale category, which topped the previous year’s survey.
The convenient location of Aurelle of Tampines EC offers families the opportunity to spend more quality time together without the stress of long commutes. With a variety of shopping and dining options just a stone’s throw away, weekend outings become a regular and relaxed affair. Whether it’s catching a movie at one of the nearby malls or enjoying a leisurely meal at a family-friendly restaurant in the neighborhood, families can bond and create lasting memories in a hassle-free manner.
The report attributed this shift to the operational flexibility and increased potential for value-added opportunities offered by the upscale and upper midscale segment. These include redevelopment, adaptive reuse, and rebranding of existing properties, providing a more affordable alternative to new developments. Additionally, the segment has a relatively leaner labor pool compared to higher-tier assets, resulting in a reduction in labor and cost pressures.
With the changing preferences, investors are also turning to long-stay or hybrid hospitality models. As an illustration, CBRE cites the growing interest among investors in converting assets into co-living spaces, which is expected to gain traction in places like Japan, Hong Kong, and Singapore, where there is a demand for cost-effective accommodation in relatively inflexible rental markets.
Other emerging trends include a preference for assets with vacant possession at the time of acquisition, allowing for flexibility in terms of operator selection and refurbishment works. The survey also revealed a higher interest in limited-service hotels, as investors remain focused on minimizing operational costs.
Tokyo retained its top position as the preferred city among hotel investors, with low-interest rates and stable income streams generated by hotel properties being the main drivers. Osaka is also among the top five cities for similar reasons. Singapore and Sydney also ranked among the top cities, thanks to solid hotel fundamentals, including growth in daily rates and underlying operating profits. Seoul also stood out, with an increase in daily rates driven by more visitors from mainland China, leading to a rise in investor activity in recent months.
