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Thai Hotel Investment Likely To Slow Down

Many a hotel and luxury spa in Sukhumvit and across Thailand have been popping up, as hotel investment in the country hit an all-time high in 2017, hitting 17 billion baht ($524.7 million), led by several large, marquee transactions.

However, in spite of the high level of interest that investors are displaying towards the country, property consultancy firm JLL says that Thailand’s transaction volume in 2018 is unlikely to match the prior year’s records as there are less investment-grade hotel assets present on the market.

Data from the consultancy firm shows that 12 hotel assets were sold in 2017, which amounted to a total of 17 billion baht. That’s a 70% increase from 2016, and is 39.7% higher than the five-year annual recorded between 2012 and 2016, which sits at 12.2 billion baht.

In terms of value, Bangkok and its many a hotel and luxury spa in Sukhumvit amounted for a huge chuck of the investment activity in the country, with six hotel assets sold for a total of 14 billion baht, which is approximately 80% of the market on their own.

These six assets include the Edition hotel at the Mahanakorn development, which was sold to a private equity fund in the US, alongside its observation deck, while Singapore’s Carlton hotel group acquired a 34-storey partially completed building on SukhumvitSoi 27.

The property that was once the Premier Inn, located on Sukhumvit, was acquired by Singapore’s V Hotel Group, whilst the Somerset Lake Point was acquired by Japan’s JR Kyushu. Bangkok Dusit Medical Services, meanwhile, acquired the SwissotelNaiLert Park, whilst a serviced apartment project in Thong Lorwas sold to a private investor.

Other major transactions outside of Bangkok involved the Dusit Island Resort Chiang Rai, the Pilanta Resort on Phi Phi Island, as well as the Premier Inn Pattaya, which was acquired by Singapore’s V Hotel Group as part of a portfolio.

2018 also saw an increase in foreign investment, accounting for more than half of trade value in Thailand, with buyers from Singapore, Japan and the US accounting for the largest investments.

Mike Batchelor, CEO of JLL’s Hotels and Hospitality Group Asia, attributes the strong level of investment in Thailand’s hotel market to continued growth in visitor arrivals as well as healthy hotel trading performance, aided by stability in the sociopolitical front.

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