Total inbound hotel investment volume in Asia-Pacific for 1H2017 was just over US$2.9 billion ($4 billion), according to a recent report released by JLL. Twenty-eight hotel deals across six countries, which totalled more than 5,000 keys, were recorded. The average price per key of all transactions stood at US$486,600.

Investors focused on gateway cities such as Hong Kong, Singapore, Sydney and Melbourne. This means they continue to favour destinations with strong tourism and trading foundations, where long-term demand and supply is in balance, says JLL.

A significant hotel transaction in Australia was Royal Group’s sale of the InterContinental Sydney Double Bay (below) to China-based real estate consortium Shanghai United Real Estate for $145 million. This marked the highest value recorded for the sale of a Sydney suburban hotel. However, most of the country’s inbound investment went to Melbourne.

Source: InterContinental Sydney Double Bay

JLL expects hotel transaction activity in Australia to continue throughout the year, given the country’s low interest rate, weak currency and sound economic growth outlook. Nevertheless, opportunities to buy hotels in gateway destinations in the region remain limited and investors are expected to seek alternative investment opportunities in emerging markets such as Vietnam and Cambodia.