Hotel investment activity muted at start of 2019

Global hotel investment activity in Q1 was slightly muted due to the absence of large transactions and investors in some markets adopting a wait-and-see approach due to political uncertainty. Global hotel investment volumes totalled US$11.8 billion during the quarter, 25% lower than the same time last year.

Asia Pacific registers growth in hotel investment volumes following muted 2018

Asia Pacific achieved strong growth of 12% from the same quarter of the previous year, driven by a 50% rise in China. Japan recorded the highest number of hotel transactions in the region as asset owners continue to ride on the anticipated tourism boom from the upcoming 2019 Rugby World Cup, 2020 Olympic Games and the 2025 World Expo.

In EMEA, hotel transaction volumes declined by 22% from the first quarter of 2018 due to a lower number of single-asset deals. The UK was the most liquid market in the region despite ongoing political uncertainty as deal volumes reached US$2.0 billion in Q1, up 77% compared to Q1 2018. Investors from the Middle East and Europe show strong appetite for UK assets, and we expect this trend to continue in the remainder of 2019.

In the Americas, the U.S. recorded a 35% decrease in Q1 hotel sales, mainly due to several large portfolio deals which took place in Q1 2018. Single-asset deals accounted for 83% of total volumes, compared to 55% during the same period last year. Private equity investors continued to be the largest buyer group, representing 27% of purchases, with developers in second place with 25% of acquisitions.

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