Page 23 - ar2012

annual report 2012
21
performance are likely to moderate to some extent
due to the increases in supply and the signifcant
growth in RevPAR achieved between 2010 and 2011.
Growth in the Singapore hotel market will be infuenced
by the following:
• Further growth in visitor arrivals from Singapore’s
main source markets in Asia Pacific such as
Indonesia, China (PRC) and Australia.
• Singapore’s ability to maintain its title as one of
the top MICE destinations in the short to medium
term. The city state’s excellent infrastructure,
well-established venue spaces and extensive air
connectivity allows it to cater to both regional
and global markets.
• New leisure demand generators, such as Gardens by
the Bay, the River Safari and the proposed Kallang
SportsHub, whichwill continue todrive visitor arrivals.
• Growth in key industries in Singapore, such as
electronics, oil & gas, shipping, banking and
fnance, will lead to more fexibility with regards
to increases in room rates given Singapore hotel’s
reliance on corporate demand.
Encouragingly, Singapore continues to experience
the positive impact of induced demand, both from
a leisure and MICE perspective, from the integrated
resorts which to date have generated demand primarily
from markets in close proximity to Singapore such
as Indonesia, Malaysia and China (PRC). This trend
is expected to continue going forward especially
as economic growth of regional markets such as
Indonesia and Malaysia outpace long haul markets
such as the USA.
Hotel Property Market Outlook
In 2013, we expect global hotel transaction volume of
approximately US$ 33 billion. In Asia, Japan is expected
to see the most investment activity followed by other
pockets of activity in the region. We expect hotel
transaction volume in Asia to grow from US$ 1.9 billion
in 2012 to US$ 2.4 billion in 2013.
Investor appetite for hotel investment opportunities in
Singapore remains one of the highest in the region, given
the country’s openeconomy, transparent legal systemand
soliddemand fundamentals. However, hotels inSingapore
are tightly held by family companies and publicly listed
entities, with opportunities to acquire establishedproduct
somewhat scarce as a consequence. Much of 2012 was
characterised by such a shortage of available established
stock leading to a dearth of major transactions, although
a lingering gap between buyer and seller expectations
on certain properties may have stalled some potential
transactions. That said, the robust domestic and regional
demand in hotel-zoned government land sales, with
sites attracting a high number of bids and record prices,
is refective of investor appetite for the hotel sector in
Singapore. Furthermore, the fnal quarter of the year
saw two major direct hotel transactions notably those
of the Hotel Grand Pacifc (closed in October 2012 at a
price of S$210million) and the Hotel Windsor (reported
as agreed in October 2012 at a price of S$163 million).
We expect investor sentiment towards Singapore
moving forward will continue to be solid. We expect
hotel assets that do come to the market to be met with
healthy levels of interest, particularly from buyers in
Singapore, Malaysia, Thailand and Indonesia, together
with some interest from North Asia as well.
Investor appetite for hotel investment opportunities in
Singapore remains one of the highest in the region, given
the country’s open economy, transparent legal system and
solid demand fundamentals.
Lobby, Studio M