Thailand Hotel Investment Market Update Thailand Tourism Forum 2014

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1 Nihat Ercan Senior Vice President, Investment Sales Asia Hotels & Hospitality Group 21 st April 2014 Thailand Hotel Investment Market Update Thailand Tourism Forum 2014

2 Global Hotels Transaction Volume 2013 a standout year, 2014 to maintain current pace USD Billions Source: JLL USD % 2013 to Billions 2012 Americas % EMEA % Asia % Australasia % TOTAL % Americas EMEA Asia Australasia Global 1

3 Asia Hotels Transaction Volume Investment spanning regionally across Asia Maldives 1% Taiwan 2% India 4% Philippines 5% Others 11% China 25% Thailand 4% Hong Kong 6% Maldives 3% Others 7% Japan 36% Singapore 7% China 17% Thailand 11% Japan 18% Source: JLL Hong Kong 16% Singapore 27% 2

4 Thailand Hotels Transaction Volume Steady growth of inbound capital into Thailand since 2009, forecast THB 10 billion in 2014 THB Billions THB 15.2 THB 9.6 THB 9.6 THB 10.2 THB 8.4 THB 5.5? THB 0.9 THB NIL Airport Closure Source: JLL Military Coup Global Financial Crisis Flood Political Protest 3

5 Thailand Hotels Transaction Volume 2013 Phuket led investment within Thailand Bangkok 21.4% THB 2.2 B Hua Hin 4.5% THB 456 M Pattaya 2.1% THB 210 M Khon Kaen 9.1% THB 931 M Phuket 57.9% THB 5.9 B Koh Samui 5.0% THB 513 M Source: JLL 4

6 Global Hotels v. Thailand Transaction Metrics 2013 Thailand represents good buying opportunities when compared regionally Global Asia Thailand Total No. of Transaction Total Transaction Volume (USD Billions) Average Transaction Volume (USD Millions) Price per Key (USD) 186, , ,000 Source: JLL 5

7 Thailand Hotels Seller/Buyer Profile 2013 Hotel / serviced apartment operators contributed more than 50% of the transacted volume as buyer Buyer Profile Seller Profile Hotel / SA Operator 55% Investment Fund 34% Development / Property Company Investment Fund 30% 9% Corporates 2% Undisclosed 2% Corporates 29% Development / Property Company Banks / Institutional Investor 27% 5% Undisclosed 6% Source: JLL 6

8 Thailand Hotels Buyer/Seller Origin 2013 Around half of hotel investment in Thailand is by domestic players with US investors growing share Buyer Seller 5% 51% 9% 57% 10% 34% 34% Source: JLL Other Countries 7

9 Emerging Class of Investors in Thailand - REITs Thailand REITs to emerge as active investors domestically over coming years Singapore REITs have successfully acquired hotels / resorts throughout Asia Pacific; Traded publicly on the stock exchange Three out of four hospitality REITs in Singapore listed in the last 24 months; Enjoy special tax waiver REITs Invest solely and directly in real estate assets Singapore Hospitality REITs include: 1. CDL Hospitality Trusts (2006) 2. Ascendas Hospitality Trust (2012) 3. Far East Hospitality Trust (2012) 4. OUE Hospitality Trust (2013) Typically offer shareholder s high yield Liquid way of investing in the real estate market 8

10 Notable Hotel Acquisitions by REITs 2013 Singapore Hospitality REITs acquired in Singapore, Japan and the Maldives Jumeirah Dhevanfushi, The Maldives Park Hotel Clarke Quay, Singapore CDL Hospitality Trusts Ascendas Hospitality Trust Angsana Velavaru, The Maldives Osaka Namba Washington Plaza Hotel, Japan 9

11 Notable Thailand Transactions 2013

12 Outrigger Laguna Beach Resort Phuket 254-key absolute beachfront five-star resort on Phuket's west coast Month 00,

13 Buddy Oriental Samui Beach Resort Vacant Possession resort on Samui's Lamai Beach Month 00,

14 Crowne Plaza Sukhumvit Bangkok Grande Asset sold for THB 1.5 bil, opening in 2015 Month 00,

15 Hyatt Regency Phuket 199-key resort on Phuket s highly acclaimed Millionaire s Mile Month 00,

16 Properties / Land for Sale

17 Hilton Hua Hin Resort Iconic, beachfront resort with an initial yield of c. 6-7% Month 00,

18 Bhundhari Resort & Villas Samui 126-key beachfront resort just north of Chaweng Beach, Koh Samui Month 00,

19 Internationally Branded Serviced Apartment 129-key property in central Bangkok with vacant possession potential Month 00,

20 Ma Hotel Bangkok 30-year leasehold rights in 243-key hotel in Bangkok CBD Month 00,

4-1-14 rai Site in Kata, Phuket Closest major development site to

21 rai Site in Kata, Phuket Closest major development site to the ocean, suitable for 280-key, midscale hotel Month 00,

22 Outlook for 2014

23 Thailand International Visitor Arrivals History shows a strong resurgence of inbound tourism after major events No. of Visitors (Millions) CAGR 9.0% Growth (Annual) 25% 20% 15% 10% 5% 0% -5% -10% SARS Military Coup Global Financial Crisis Political Protests 9/11 Boxing Day Tsunami Airport Closure Floods 22

24 Thailand Hotel Trends & 2014 Outlook What holds for a year marred by protests and political instability? Resorts market (Phuket, Samui) remains largely unaffected by the recent political upheaval, in direct contrast to Bangkok with occupancy down 35% (YTD Feb 14); Deal timeframes shortening, rise in number of boutique hotels, smaller deal sizes are likely outcome; REITs to become active investors in hotels; HNWIs, owner operators and opportunistic funds are most active. Domestic and interregional capital to remain dominant; and Thailand to record circa. THB 10 billion in hotel transactions in

25 Thank you 24

Thailand Hotel Investment Market Update Thailand Tourism Forum 2015

Thailand Hotel Investment Market Update Thailand Tourism Forum 2015 Mike Batchelor Managing Director, Investment Sales Asia JLL Hotels & Hospitality Group 26 January 2015 2004 2005 2006 2007 2008 2009