Increased investor intent in Asia Pacific

ASIA PACIFIC – CBRE’s 2025 Asia Pacific Hotel Investor Intentions Survey shows that more than 72% of investors plan to increase their hotel investment allocations in Asia Pacific.

Rebound in tourist arrivals, particularly in Japan, Singapore and Australia, sparks investor interest in hotel assets amid limited supply in the region. Tokyo leads as the top city for hotel investment, followed by Sydney, with Seoul and Bangkok tied for third, and Singapore and Osaka both in fifth place.

Overall, net intentions for survey respondents measured 28% with approximately 45% looking to increase their purchasing volume in 2025 by more than 10%.

REITs indicated that they expect to be in buy mode in 2025 with net intentions measuring 22% in this year’s survey, up from -13% a year prior. CBRE said hotel REITs within Japan have been extremely active over the past period, contributing $2.41 billion of hotel investment in 2024 (up 86% YOY).

After two years of being the most active buyers in the region, private investors said they expect a greater level of selling in 2025 as they look to capitalize on improving market sentiment.

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Investment by private equity and real estate funds for hotels picked up in 2024 with momentum expected to continue in 2025. These investors are active in Japan, as well as Australia, Singapore and Korea.

After two years of being the most active buyers in the region, private investors said they expect a greater level of selling in 2025 as they look to capitalize on improving market sentiment after acquiring assets during a period of price dislocation. Net intentions for this buyer cohort stood at 6% in 2025, down from 15% a year prior. Privates will be most active in the developing markets, particularly in Southeast Asia.

Other key findings include:

• After a period of strong investor activity in the luxury sector, some of that interest has shifted toward the upscale and upper midscale segment.
• Investors are looking more closely at value-add strategies, with rebranding and redevelopment opportunities in this segment seen as attractive in the current market at a time when the cost of new development remains high.
• While investment activity is expected to stay robust, well-located high-quality hotel assets in key markets will remain keenly sought after.
• Investors are awaiting greater certainty on the magnitude of future interest rate cuts before committing to significant investment decisions outside of Japan.
• Expectations of continued growth in mainland Chinese outbound visitors, further room for occupancy improvement, and increasing institutional investor interest should help counteract some of the current headwinds.
• Tokyo remains the top city for hotel investment, followed by Sydney second, with Seoul and Bangkok tied for third, and Singapore and Osaka both in fifth place.

“After performing strongly over the past 18 months, investors anticipate hotel and living assets in Asia Pacific to have the most optimistic pricing expectations in 2025. The boost in international arrivals from key markets has pushed up APAC hotel room rates, ensuring a continuation of the income growth hotel operators achieved last year,” said Steve Carroll, CBRE’s head of  Hotels, Capital Markets, Asia Pacific.