Phuket ranked tops by hotel investors

Phuket could cash in on investors’ intentions to buy hotel assets in the Asia-Pacific, according to the latest Jones Lang LaSalle hotel-investment sentiment survey.

The survey of 2,000 of the world’s largest investors and owners of tourism properties nominated Phuket as the most popular destination in the region.

Responses also suggested hotel trading expectations were the most positive since September 2000.

However this sentiment may not yet translate into an immediate windfall: the primary intention of investors across the region is to hold their assets and ride an expected upturn in most markets.

“Investors appreciate the access, marketing, physical appeal and performance of the market, as well as the economic and tourism growth of Thailand. This is evidenced by the recent spate of investment activity in Bangkok, Phuket and Pattaya,” said Jones Lang LaSalle Hotels chief executive David Gibson.

With high potential investment in Phuket, Phuket Square invests over Bt2 billion to turn 55 rai of land on Patong beace at Phuket province into ‘Jungceylon’, which is the first Thailand lifestyle centre. The project is a unique kind of shopping complex included dining, entertaining, pampering, and relaxing place.

Asia Pacific investors have shown a sharp upswing in short-term trading sentiment since December 2001, and at present it is resoundingly positive. Expectations for the Asia Pacific, where the influence and potential of China has the most impact, are even more positive than sentiment in Europe and the Americas,” Gibson said.

“In Australia, Sydney and Brisbane are set to benefit from stable supply, an expected rebound in international arrivals and, in Brisbane’s case, strong domestic corporate and leisure demand,” Gibson said. “And investors clearly believe Beijing and Shanghai’s recovery from the impact of Sars [severe Acute Respiratory Syndrome] will be swift and strong”.

On all markets except Manila and Jakarta, trading conditions are expected to be positive for the next two years. Shanghai and Sydney are expected to lead the way, followed by Beijing, Phuket and Brisbane.

At this year’s beginning, Asia-Pacific markets were spread evenly between the early downturn and the late upturn of the market cycle. Now the majority of markets are centred on the early upturn phase, Gibson said.

“Counter-cyclical investors should examine opportunities in Bali, Singapore and Tokyo, which are currently positioned in the trough of the cycle,” he said.

In light of the most positive short-term outlook for the region since December 2000, investors have lowered their return expectations. Across the 20 markets surveyed, investors expect an average initial yield of 10.4 per cent.

“Continued low interest rates as well as an expected market upturn are driving this yield compression,” said Gibson.

Indicative of strong investor interest and expected trading recovery, yields for Beijing, Shanghai and Hong Kong are expected to narrow during the next six months. “These markets potentially offer opportunities to investors seeking capital appreciation,” he said.

Beijing and Shanghai have witnessed sharp yield contractions since the last survey, highlighting investors’ keen interest in the potential of the Chinese markets, despite profit-repatriation concerns and transaction difficulties.

Given its poor performance and instability, Manila is the only market where investors maintain a sell sentiment.

--The Nation 2003-11-27

We have had six hotels acquired using our brokerage service since August. The buying demand is there, especially for investors wanting to acquire hotels to turn them into retirement homes for the elderly from Europe. Health Centers for Europeans are also a top investment sector now.

We now have over 80 hotels, guest house listings through out Thailand. Requires an investment of just 2 million Baht on some. Other Hotels are massive and simply spectacular.The investment needed can be up to 3 billion Baht.

www.sunbeltasia.com