We have recently undertaken research in Asia Pacific regions, interviewing institutions and fund managers in Asia Pacific, and here are some of the trends we have observed from these interviews.

 

What kind of hotel investments are of interest from Asian Investors?

 

Our research shows that their interests are quite diversified, in general, 5-star hotels or luxury resorts are still popular from investors.

 

On the other hand, some niche projects are also popular such as Eco-hotels, backpacker hotels are also interesting assets for consideration for certain markets as it continues to grow. Investors appear to prefer investing in existing projects that requires funding for redevelopment or upgrades as opposed to brand new development projects.

 

Increasingly, we are also seeing Asian investors investing in global projects.

 

The most active investors in Asia Pacific in the hospitality industry are institutions from Australia, China, Hong Kong, Japan, Singapore and Malaysia, Indian investors are also becoming quite active in the property market in the recent years.

 

What areas are they investing?

 

Australian investors are now investing in global properties, Singaporean and Malaysian investors are very active in global markets, especially SE Asia. Hong Kong investors have been very active in China, Taiwan and SE Asia. Singaporean investors are also active in Japan as well. Japanese and Korean investors are active in Asia especially China, SE Asia and Australia.

 

However, recent events in Thailand has deterred some investors’ interest from Thailand because of political issues over there.

 

Australia remains quite popular for Asian investors because of its political stability and tourism is one of its key industries, heavily supported by the Government. In terms of markets outside Asia Pacific, we have seen Asian investors investing into North American market actively, as well as Middle East and European markets including some of the luxury hotels and resorts.

 

What kind of investment capital they can provide?

 

It appears that Asian investors are relatively immune to the credit crunch, many investment funds are associated with the region’s conglomerates, they have been internally funded instead of relying on credit market. The debt ratio therefore, is typically lower than US investors. They can provide capital from $1m to $100m, but depending on the project. Many Asian real estate investment companies are subsidiaries of major construction firms, and funding will not just in the form of cash injection.