Hotels in Singapore became more sought-after in the third quarter of 2018 due to robust performance and metrics, according to CBRE’s latest Asia Pacific Hotel Trends report.
For instance, visitor arrivals here during the first three quarters of the year increased by 7.4 percent year-on-year to 14.03 million.
The average daily rate (ADR) for hotels across the city-state also rose slightly by 4.14 percent to $277 in September compared to $266 during the same month last year. At the same time, island-wide revenue per available room (RevPAR) rose by 6.15 percent from $215 to $229.
In September, the overall occupancy of Singapore hotels also reached 82.8 percent.
Consequently, property developers are showing strong demand for new hotel sites, mainly in the mid-tier segment. These companies are also mulling to convert existing sites into hotels.
“In addition, the government is finally lifting the moratorium on new hotel development by introducing new hotel sites, as well as allowing possible conversions. Examples include Singtel Hill Street and Waterloo Apartments,” noted CBRE.
“There is strong interest at the top-end of the market, with a number of sovereign wealth funds understood to be seeking opportunities. Private and high-net-worth buyers are also looking to increase their exposure to lower- and mid-range hotels.”
While buying sentiment among local investors is healthy, the lack of available hotels for sale remains a major hindrance. Funds and private investors are also on the lookout, but transaction activity was limited in Q3, with hotels being tightly held by their owners, added the property consultancy.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com