Japan’s hotel sector to shine brightly as investors look to cash in on Tokyo 2020 Olympics

28-Feb-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

The US-China trade war, volatile equity markets, geopolitical tensions and uncertain pace of future interest rate increases are among factors that will hold back investors from the hotels sector this year, according to a JLL report.

But in the run-up to two major events soon to be hosted in Tokyo, Japan stands to remain something of an exception.

Japan, which was the top market for hotel deals last year, is expected to lead the region again this year on the back of the Rugby World Cup and the Tokyo 2020 Summer Olympic Games.

“Japan’s hotel market has captured investor interest globally,” said Nihat Ercan, head of hotel investment sales in Asia for JLL’s Hotel and Hospitality Group. “Nearly 30 per cent of all investment into Asia-Pacific was in Japan, overtaking China in the top spot.”

The property consultant expects global hotel transaction volumes to drop slightly this year to $67.2 billion from $67.7 billion in 2018.

In 2018, total investment in China stood at $2.1 billion, down from $4.5 billion in 2017, while Japan generated $2.4 billion from investors, down from $ 3.3 billion in 2017.

JLL noted that investment momentum in Japan is expected to build as investors explore selling their hotel assets to ride the anticipated tourism boom.

The Japanese government is targeting 40 million overseas tourists by 2020, the equivalent of around 30 per cent of the country’s population.

JLL expects total transaction volumes in Asia to reach $9.5 billion this year, up 15 per cent from $8.3 billion in 2018.

It also said that Europe, the Middle East and Africa (EMEA) will continue to see a drop in transaction volumes for the third year in a row. JLL expects investment in EMEA to reach $21.2 billion, down from $22.9 billion in 2018 and $24.7 billion in 2017.

Meanwhile in US, the investment is expected to remain flat this year at $36.5 billion.



Category: Japan

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