Hong Kong hotel investment to drop 35% YoY in 2024

JLL said investors are becoming more selective.

Real estate expert JLL expects Hong Kong hotel investment volume to fall 35% YoY to US$500m in 2024.

Whilst the investment market remains active, JLL said investors have become more selective, opting for city centre hotels in prime locations.

“The city is experiencing high vacancy rates in many hotels, particularly in the three- and four-star categories, largely due to changing tourist consumption patterns,” said Oscar Chan, head of Capital Markets at JLL in Hong Kong.

In 2025, JLL expects the prevalence of wide bid-ask spreads and increasing tourism growth to prompt more investment activity.

Meanwhile, Asia Pacific hotel investments are expected to grow 4.3% to US$12.2b in 2024 amid an influx of investment activity and a more favourable interest rate environment.

Year-to-date (YTD), cumulative transaction volumes totalled US$9.05b, up 15% from US$7.87b in 2023.

Cross-border investment surged YTD in September 2024 driven by large transactions in Asia, while Australia experienced a rare lull in annual activity.