Like 1st half of 2019, positive vibes continue over 2nd quarter and beyond for the hotel property market in Singapore.
It started with a bang in July, when occupancy registered 93.8%, the highest recorded in fifteen years.
That gives the investors a pat on their back, who prudently contributed to hotel transactions worth $1.7 billion this year.
2019 could be one of the best hotel investment sales as more transactions most likely to close before the year ends.
As trade-war threats and other problems intensify, Singapore remains the go-to choice ‘place of refuge’ for global investors considering its political stability and conducive climate for investments.
Most of them vested in hotel assets, thanks to the country’s numero uno tourism and gaming industries.
Moreover, as leaders and innovators recognize the technology readiness and appreciate the public and private sector collaboration in Singapore, many well-known brands across the globe found their way in 2019.
The latest includes British Technology Company Dyson moving its headquarters here and setting up its manufacturing base to roll out its new electric car in 2021.
NTT, another with headquarters in the UK has consolidated its various IT businesses and services worldwide to become a new single global technology service provider and has set up its Asia-Pacific headquarters in Singapore.
US giant Cisco, which has been growing its Asean market from Singapore opened its first Co-Innovation Centre here for South East Asia and the Cybersecurity Centre of Excellence (CCX) in collaboration with the Economic Development Board (EDB) to focus on innovations and security.
It is notable that at the beginning of the year, Desmond Sim, Head of Research for Singapore and SouthEast Asia, CBRE foresaw the effects of trade wars resulting in production units shifted to SouthEast Asia and Regional Head Offices established in Singapore.
Demand is Expected to Grow
Further, an analysis report by Cushman & Wakefield earlier this year revealed an average supply of a meagre 742 keys per year between 2018 and 2022, while it was overabundant at 3,357 keys between 2014 to 2017.
But by year end, the demand is expected to grow 2% or 1400 keys, as reported by recent JLL studies.
However, with many more new and rejuvenation plans announced by the Singapore Tourism Board (STB), there are plenty of opportunities for future hotel asset investments.
The biggest eco-tourism spot Mandai would brighten up in 2023 with a rain-forest themed park, a natural bird park, eco-resort etc. with the existing best zoo, night safari and river safari.
Also, new tourism development site has been identified at the second CBD – Jurong Lake District to showcase first-of-its-kind attractions and poised for public use by 2026.
The Great Southern Waterfront, dreamed to be fulfilled by 2030 with picturesque settings to live, work and play at the erstwhile Tanjong Pagar Terminal is yet another great spot available for wildest imaginations.
Since their inception in 2010, the first rejuvenation plans have been announced recently for Marina Bay Sands and Resorts World Sentosa.
An intended mix of tourist attractions plus MICE (Meetings, Incentives, Conferences and Exhibitions) facilities should further enhance the attractiveness.
Another futuristic effort will be the initiation of Terminal 5 works in Changi Airport to accommodate additional 50 million passengers within the next decade.
Meanwhile, the first assessment of team WTTC and JLL on tourism activities worldwide is out this year.
Their initiative ‘Destination 2030’ has categorized Singapore as ‘Balanced Dynamics’ for readiness in travel and tourism growth based on a comprehensive index of 75 indicators in 50 fifty global markets on par with cities like Beijing, Chicago, Dubai, Hong Kong, Munich, Osaka, Shanghai, Tokyo and Washington, DC.
It recognizes the readiness of these cities for future visitor growth through extra runways without affecting their urban landscapes and financial hubs.
This year, with the opening of Sentosa, Capri, Dusit Thani Laguna, The Outpost, Yotelair Changi, The Barracks etc the total available rooms in the city would exceed 68,000.
Moreover, the leader has finally emerged, thanks to the reopening of Raffles Hotel after the two-year renovation.
Nearby at Shenton Way, the hotel and serviced residences, Oakwood Premier OUE Singapore has been acquired at $289 million, by Far East Consortium (FEC), which already operates Dorsett Singapore hotel.
True, the spirit is great with plentiful activities. Year 2019 is all set to become a cherished and memorable one for the buoyant hotel property market.
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