Investor Appetite for Singapore’s Hotel Market to Stay Healthy – The Business Times

Outlook is bright with increase in tourist arrivals and initiatives to develop new attractions and rejuvenate existing ones.

AFTER achieving a five-year record high of S$1 billion in 2018, the Singapore hotel investment market has remained upbeat for 1H 2019 with four major transactions comprising a total transacted value of S$1.35 billion. Transactions in 1H 2019 include the following:

  • April: 25 per cent stake in 575-key Marina Mandarin acquired by Singapore-based United Industrial Corp at S$190 million, reflecting the hotel value at S$760 million (S$1.3 million/key)
  • May: 146-key Ascott Raffles Singapore acquired by private investor Cheong Sim Lam for S$353.3 million (S$2.4 million/key)
  • June: 90-key Claremont Hotel Singapore acquired by Singapore-based luxury hotel group,Garcha Hotels, for S$70 million (S$0.78 million/key)
  • June: 241-key Ibis Novena acquired by Bangladeshi-based industrial conglomerate, S Alam Group, for S$170 million (S$0.71 million/key)

Kicking off 2H 2019, the latest July transaction at S$235 million (S$0.74 million/key), involves Singapore-based Datapulse Technology and PAM Holdings I (BVI) Limited acquiring the 319-key Bay Hotel Singapore, with 5 per cent and 95 per cent stakes respectively.

Based on the major hospitality asset transactions that we have noted, we observe that the publicly available expected yield ranges between 3 per cent and 5 per cent.

The total transacted value in 1H 2019 has tripled from 1H 2018, which registered about S$407 million. This is mainly attributed to a higher number of transactions of full-service properties with larger inventories as compared to 1H 2018 which recorded more transactions for limited service properties with smaller inventories.

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