Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

Singapore Hotel Investments Heating Up

27/02/2019

The July 2018 property cooling measures has substantially shifted investor focus to other real estate assets away from the residential sector.

Hotel investments have typically been a small proportion of the total investment tally in Singapore. However in 2018, hotel investment sales hit a four-year high of S$1.36 billion, Cushman & Wakefield research indicates.

We are seeing a lot more interest from investors looking to trade hospitality assets. Waterloo Apartments was the first en bloc site in the current en bloc cycle to have received permission to be re-zoned for hotel use after the July 2018 cooling measures. It was sold in November 2018. That sale was the catalyst for the sale of several hotel assets in quick succession – Ascott Raffles Place, the Stevens Road hotels and the Club Street hotel site at a record. All these point to rising interest in investors acquiring sites for hotel use. Late last year, Fragrance Group announced plans to develop hotels on the Tower 15 plot it purchased.

Except for the sites in the central areas with restrictions on hotel use, the market is looking at all other commercial sites outside of these restricted areas with the potential to be converted to hotel use.

Factors Contributing to Hotel Investment Interest

This uptick is being driven by a number of factors. First, the very healthy tourist arrival numbers projected and secondly, the shift to other asset classes following the July 2018 cooling measures that have dampened demand for residential sites. The optimism around the hospitality sector has emboldened investors to look at this asset class seriously.

Tourism plays a big part in the optimism amongst investors for hotel sites. Tourist numbers in 2016 and 2017 saw record arrivals, and for the period of January to November in 2018, inbound tourism grew 6.6 per cent year-on-year.

Outlook on Supply

The supply pipeline in the next few years is expected to taper. Cushman & Wakefield numbers show a dip in the number of extra rooms available on the market, with an average of 742 extra rooms per year from 2018 to 2022, down from 3,357 annually between 2014 and 2017. And with the Tourism Board’s recent announcement to revitalise Orchard Road, the focus on hotel sites is expected to sharpen further.

Seeking conversions to hotel use seem to be a quick fix for residential en bloc sellers looking to sell. But investors continue to tread carefully given that the economy is expected to slow and sentiments on investments appear muted. The first quarter investment tally will be a useful indicator on the outlook for hotel investments for the rest of the year.

Related Insights

Singapore
Insights • Insights

Commentary On Q2 2022 URA Real Estate Statistics

New sales volumes picked up in Q2 2022 with 2,397 units transacted, 31.3% q-o-q higher than that in the preceding quarter given robust sales performances at major new launches.
Xian Yang Wong • 29/07/2022
istockphoto-2022-cardimage-Policy--Watch-SG
Insights • Investment

Cushman & Wakefield's Comments On Ura May 2022 Developer Sales

On the back of more launches in May, developers sold 1,356 new private homes (excluding ECs) last month – the highest monthly volumes since November 2021 when 1,547 new units were sold.
Xian Yang Wong • 15/06/2022
istockphoto-2022-cardimage-Policy--Watch-SG
Insights • Investment

Policy Watch Singapore: Budget 2022

Over the last two years, the Singapore Government dedicated a total of close to S$100 billion to combat the impact of Covid-19. 
Xian Yang Wong • 21/02/2022

Related Stories

Dexcom Philippines New Office Fit-out Project
Dexcom Philippines • Healthcare
Learn More
Cushman & Wakefield Stories
Booking.com Philippines Inc. • Travel
Learn More
Cushman & Wakefield Stories
OMD Philippines • Advertising
Learn More
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
MORE OPTIONS
AGREE AND CLOSE
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS