Apac hotel investment volume falls 23% y-o-y in 1H2025: JLL

According to JLL, Apac hotel investment volume totalled US$4.7 billion in the first half of the year (Picture: Samuel Isaac Chua/The Edge Singapore)

Asia Pacific (Apac) hotel investments declined in 1H2025 as global macroeconomic uncertainty led to a more cautious investment environment. According to research by JLL, Apac hotel deals totalled US$4.7 billion ($6 billion) in the first half of the year, sliding 23% compared to the same period last year.

“Coming off a high base last year, the level of investment moderation is indicative of a more cautious investment market whereby a realignment of capital sources in the hotel investment landscape is occurring," says Nihat Ercan, CEO of JLL Hotels & Hospitality Group for Apac.

JLL says that investors were more selective in 1H2025, focusing on more established hospitality markets in the region. A total of 84% of 1H2025 hotel transaction volume occurred in just five countries. Japan topped the list, garnering US$1.5 billion in hotel transactions. Greater China recorded US$744 million in hotel investments, followed by Australia (US$664 million), Singapore (US$546 million) and South Korea (US$504 million).

At the same time, the bid-ask spread between buyers and sellers has widened, with sellers holding firm on price expectations and buyers applying greater scrutiny. This, says JLL, has led to extended due diligence periods on both sides of transactions, further contributing to the decline in 1H2025 volume.

Nonetheless, bright spots remain in the market. "In our interactions, although institutional investors remain selective, private capital is moving decisively to secure prime hospitality assets that offer both defensive income characteristics and growth potential, which should ensure an uptick in activity in this year and into next,” says Ercan.

According to JLL, private equity firms have boosted capital allocations to hospitality assets, resulting in a 6% y-o-y increase in investment volumes. Capital invested by high-net-worth individuals (HNWIs) into hotels has also surged 54% y-o-y in 1H2025.

Looking ahead, JLL expects investment activity to pick up in the second half of the year, resulting in a full-year transaction volume of US$12.8 billion, up 5% from 2024 figures. “We anticipate private equity funds, family offices, and regional operators with access to private capital to emerge as the most active buyers through year-end as they capitalise on assets requiring operational expertise to maximise value,” adds Ercan.

In Singapore, full-year hotel transaction volume is predicted to hit US$1.2 billion. According to JLL, investor preferences in the city-state largely fall into two categories: hybrid hotels with extended stay components that attract private equity investments, and luxury boutique hotels that draw HNWIs.

“Singapore’s boutique hotel sector continues to attract private capital seeking both diversification and long-term capital value,” notes Tan Ling Wei, senior vice president for investment sales at JLL Hotels & Hospitality Group, Singapore.

Tan adds that investors are showing a strong appetite for heritage hotels and other properties that “offer authentic guest experiences and integration within the city’s cultural fabric”.