LaSalle Investment Management, a division of the world’s second-largest commercial real estate brokerage, said it favors Asian hotels because of high occupancy rates.
Revenue per available room in luxury hotels in Tokyo climbed almost 38 percent in the first six months of 2012 from a year earlier, while Shanghai’s top-tier hotels had growth of 28 percent and Jakarta’s upscale hotels’ revenue climbed 21 percent, Jones Lang LaSalle Hotels figures show.
LaSalle Investment, which manages about $7 billion in property in Asia, is betting that an increase in prices of higher-quality properties, driven by demand from pension and sovereign wealth funds, will attract other investors. International visitor arrivals to Southeast Asia grew 8 percent in May from a year earlier, while in northeast Asia and south Asia they rose 4 percent and 6 percent, respectively, the latest figures from Pacific Asia Travel Association showed.
Incomes “are growing quite rapidly, particularly in China and developing Asia, and what historically has gone hand in hand with that is the desire to travel,” Guest told reporters in Sydney today. In most of Asia, “hotel stock is outdated and occupancy rates have remained high and stable.”
Economies in Asia excluding Japan will grow an average of about 5 percent in 2013, compared with 2.5 percent expansion in the rest of the world, Guest said, citing figures from IHS Global Insight Inc.
Industrial properties are also attractive investments as supply constraints amid growing demand boost returns, Guest said. Tokyo, Singapore and Hong Kong were among the five most expensive cities for logistic property rents in the three months to Sept. 30, driven by demand for “more sophisticated, modern facilities,” according to broker CBRE Group Inc.
In Australia, tight vacancy rates in inner and urban areas of Sydney and early signs of a recovery in the nation’s most populous city make apartments an attractive investment, said Alexandra Gray, Sydney-based associate director for research and strategy at LaSalle Investment, at the press conference.
Home prices in Sydney rose 2.5 percent in the 11 months to Nov. 30, the biggest gain among Australia’s five biggest cities, with the city’s apartment prices jumping 4.1 percent, figures from researcher RP Data showed. Prices of houses and apartments fell 0.6 percent across the nation’s eight state and territory capitals during the period, the data showed.
LaSalle Investment, the unit of Chicago-based Jones Lang LaSalle Inc. (JLL:US), is partnering with local developers to build about 7,000 apartments in Sydney, Gray said.
The projects include the 318-unit Erko development in Erskineville, a southwestern suburb of Sydney about 5 kilometers (3.1 miles) from the city center, in partnership with Leighton Properties; and a joint ventures with Australand Property Group (ALZ) on two apartment projects in southwestern Sydney.
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