Mamoru Kohda, who scouts the globe for properties for Japan?s Daisho Co., began looking for a hotel in Singapore in early 2013. Within a year, the property investor and developer had acquired the newly opened Westin in the island-state?s financial district for a record price.
?Singapore?s hospitality market will continuously grow, supported by tourists and corporate travelers,? Kohda, a director at Daisho Development Singapore Pte in Brisbane, Australia, said in a phone interview. He travels the world seeking assets for the company, which has more than $1.5 billion in property holdings.
Singapore is attracting hotel chains such as Accor SA and the InterContinental Hotels Group Plc, which are both adding new properties in the island-state, where the average daily hotel room rate is the highest in Asia. Accor will open its Sofitel So brand in the business district next month and its first Ibis Styles brand in Singapore in 2016, while InterContinental opened its Holiday Inn Express in the city?s nightlife hub of Clarke Quay in March.
Investors are gravitating to Singapore because of a record number of leisure and corporate visitors and a scarcity of properties to buy. Tourist arrivals in Southeast Asia?s biggest financial center are forecast to hit a record and daily room rates exceed those in Tokyo and Hong Kong, cities with among the highest hotel rates in the region.
Eleven hotels valued at S$2.45 billion ($1.95 billion) were sold in Singapore last year, four times the total in 2012, according to deals tracked by property broker Savills Plc.
?Aggressive Bidding?
?We are seeing some pretty aggressive bidding just to get into Singapore,? said Robert McIntosh, executive director at broker CBRE Group Inc.?s Asia-Pacific hotel business in the island-state. ?Some of the landmark iconic properties, which are extremely well sought after, aren?t driven just by income, but by long-term capital gains.?
Visitor arrivals in the city off the tip of Malaysia are forecast to grow as much as 8 percent to a record 16.8 million this year from 2013, while revenue may climb by as much as 5 percent to S$24.6 billion, the Singapore Tourism Board forecasts.
Singapore accounted for 16 percent of a record 143 deals valued at $13.4 billion in the Asia-Pacific region last year, according to CBRE. That?s an increase in hotel sales from a 6.8 percent share of deals in Asia in 2012, CBRE data showed.
Record Visitors
The island-state attracted a record 15.5 million visitors and business travelers in 2013, according to the tourism board, with events such as Formula One?s night races with concerts featuring singers such as Rihanna and Justin Bieber, and attractions including a S$1 billion downtown park with a flower dome of plants from around the world that opened in 2012.
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Source: Pooja Thakur (2014). Singapore Hotels Lure Buyers With Asia?s Best Rates: Real Estate, Bloomberg http://www.bloomberg.com/news/2014-04-28/singapore-hotels-lure-buyers-with-asia-s-best-rates-real-estate.html published Apr 29, 2014. Viewed Apr 30, 2014.