Trading expectations for Asia-Pacific hotels look the brightest since September 2000 with Bris-bane, Sydney and Beijing standing out the most, a survey showed yesterday.
Shanghai, Bombay and Ho Chi Minh City followed closely in the survey of the world's 2,000 largest investors and owners of tourism properties from Jones Lang LaSalle (JLL) Hotels.
Across the 20 markets that were surveyed, investors require an average initial yield of 10.4 percent.
The main markets with negative short-term expectations are Melbourne and Kuala Lumpur, both facing continued new supply, as well as Jakarta, Bali and Manila, where the threat of terrorism and instability have eroded investor confidence.
Over a medium-term perspective, trading conditions in all markets except Manila and Jakarta are expected to be positive over the next two years, according to the results published in The Business Times.
Shanghai and Sydney are forecast to lead the way, followed by Beijing, Phuket and Brisbane.
Continued low interest rates and the expected market upturn are driving the yield compression, JLL Hotels said in the report.
"Although slightly higher than those required in December 2002, at 17.3 percent, internal rates of return are significantly lower than the 19.6 percent required at the end of 2000," it noted.
The survey reflected the return of hotel acquisition interest in the Asia-Pacific region, JLL said.