Last year was a strong year for hotel investment in Phuket and elsewhere in Thailand, the Hotels & Hospitality Group of Jones Lang LaSalle (JLL) states in a report just released.
JLL also predicts that investment in hotels will continue to be buoyant this year.
Mike Batchelor, managing director of Investment Sales Asia, at JLL’s Hotel and Hospitality Group, commented, “2012 was an exceedingly strong year for hotel investment in Thailand’s key hotels markets, including Phuket and Bangkok. Phuket, in particular, saw four major hotel transactions of more than B1 billion each.”
These were the Movenpick Resort & Spa Karon Beach, the Evason Phuket Resort & Bon Island, and Laguna Beach Resort – with combined value of more than B8 billion – and the sale of Bundarika Villas & Suites on Layan Beach for around B1.1 billion including redevelopment costs.
Mr Batchelor said, “Robust investment activity has been driven by strong investor interest in Thai hotels due to reasonable selling prices that allow for attractive investment yields ranging between 7 and and 9 per cent.
“In addition, investors anticipate greater income potential and capital gain. While Thailand’s hotel sector across all key markets reported strong performance in 2012, the momentum is likely to continue as the country’s tourism market has recovered from the Global Financial Crisis and unstable political situation,” he added.
The section of the report dealing with Phuket notes that last year, the island’s hotel market enjoyed an average daily rate (ADR) of B3,902 and an average occupancy rate of 72.4 per cent, propelling the revenue per available room (RevPAR) to B2,824, a 10.1 per cent increase from 2011.
“Despite the significant growth in hotel supply, with 2,756 additional rooms anticipated by 2015, the increase in visitor arrivals has provided demand and the outlook remains positive.
“Given current growth and an increase in the number of affluent Asian travellers with greater spending power, Phuket is poised to retain its position as one of Asia’s most popular tourist and investment destinations,” the report predicts.
“We expect 2013 to be another strong year for hotel investment in Thailand, based on several major deals that are now under negotiation in the country’s major hotel markets of Phuket, Bangkok, Pattaya, Samui and Chiang Mai,” said Mr Batchelor.
He added, “The anticipated formalisation of the new real estate investment trusts (REITs) legislation in Thailand in 2013 is expected to provide another source of investor interest across Thailand.”