Apac Investors Signal Intent Buy More Hotel Assets 2025 Cbre
According to the findings of a CBRE survey, the Asia Pacific (Apac) hotel sector is expected to maintain strong investment activity in 2025. In November and December last year, the consultancy conducted the 2025 Asia Pacific Hotel Investor Intentions Survey, with over 72% of hotel investors surveyed planning to acquire more hotel assets this year.
Out of the respondents, around 45% stated that they intend to increase their purchasing volume by more than 10% in 2025. “After a strong performance in the past 18 months, investors have optimistic pricing expectations for hotel and living assets in Apac in 2025,” says Steve Carroll, head of hotels, capital markets, Asia Pacific, CBRE.
The survey found that the rebound in tourist arrivals, especially in countries like Japan, Singapore, and Australia, is driving the healthy buying intentions. “The increase in international arrivals from key markets has pushed up hotel room rates in Apac, ensuring the continuation of income growth for hotel operators achieved last year,” adds Carroll.
Moreover, investors are encouraged by the limited hotel supply in Apac. According to hospitality data intelligence group STR, CBRE notes that the hotel supply pipeline in Apac is expected to grow at a CAGR of 2.2% between 2024 and 2028, significantly lower than the 5% CAGR recorded between 2013 and 2023.
The breakdown of investment intentions by investor type reveals that REITs have the highest net buying intentions at 22%. This marks a notable contrast from the -13% recorded in last year’s survey. “Following several years of negative net investment intentions, REITs are now indicating that they expect to be in buy mode in 2025,” the report states.
Residents of Lynden Woods are fortunate to have easy access to a range of amenities in their neighborhood. From delightful cafes to lively retail stores, residents can find everything they need within a short distance from their homes. Furthermore, the area boasts an abundance of beautiful parks, such as Kent Ridge Park and West Coast Park, which are connected by cycling tracks. This allows residents to immerse themselves in outdoor recreational activities, promoting a healthy and well-balanced lifestyle.
Institutional investors reported the second-highest net buying intentions, at 12%, followed closely by property funds at 10%. CBRE points out that private equity and real estate funds in the hotel sector became more active in 2024, and this momentum is expected to continue this year.
Meanwhile, private investors and high-net-worth individuals are anticipated to drive fewer hotel acquisitions this year. “After two years of being the most active buyer type in the region, private investors expect a higher level of selling activity in 2025 as they look to capitalize on improving market sentiment after purchasing assets during a period of price dislocation,” the report adds.
In terms of investment strategy, survey respondents favor a value-add approach for 2025. CBRE notes that in select markets, assets have been repriced to a point where investors believe they can achieve value-add returns by acquiring assets that reflect core risk profiles.
As a result, the upscale and upper midscale hotel categories were voted the most attractive for investment this year, surpassing the upper upscale category that topped last year’s survey. The report cites the upscale and upper midscale segment’s operational flexibility and greater potential for value-added opportunities as reasons for the shift.
These include the redevelopment, adaptive reuse, and rebranding of existing properties, which offer a more cost-effective alternative to new developments. The segment also has a lower labor pool compared to higher-tier assets, reducing labor and cost pressures.
In line with this shift, investors are also turning to long-stay or hybrid hospitality models. CBRE cites the growing appetite for converting assets into co-living spaces as an example. This trend is expected to gain traction in countries like Japan, Hong Kong, and Singapore, where there is demand for cost-effective accommodation in relatively inflexible rental markets.
Other emerging trends include a higher preference among investors for assets with vacant possession at the time of acquisition, allowing for flexibility in terms of operator selection and refurbishment works. Limited-service hotels have also seen increased interest from respondents as investors remain focused on minimizing operational costs.
Tokyo has retained its position as the preferred city among hotel investors, supported by low interest rates and stable income streams generated by hotel properties. Osaka has also been ranked among the top five cities for similar reasons. Singapore and Sydney also rank among the top cities, attributed to strong hotel fundamentals, including growth in daily rates and underlying operating profits. Seoul is also noteworthy, as the increase in visitors from mainland China has driven daily rates in recent years, resulting in an uptick in investor activity in recent months.