Transaction volume increases in 2017 amid steady regional hotel performance

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1 MARKETVIEW Asia Pacific Hotels, H Transaction volume increases in 2017 amid steady regional hotel performance US$ bps US$73.5 US$11.7 Bn* Including deals worth more than USD 10m each, and excluding related-party transactions HOT TOPICS Global economic growth outlook remains positive on the back of a fine showing in 2017 due to strong fundamentals. ECONOMIC GROWTH OUTLOOK IN ASIA PACIFIC REMAINS POSITIVE UNWTO projects global demand for international tourism to grow by 4.0% to 5.0% in Out of all the regions, growth is expected to be stronger in Asia Pacific at 5.0% to 6.0%. Hanoi leads RevPAR growth in local currency terms in Tourist arrivals continue to remain strong in Vietnam and it is expected to continue on growing with more international hotel operators expected to expand their presence such as Travelodge and Meliá. Investor demand remained solid as transaction volume increases. Outlook for hotel investment in Asia Pacific continues to be upbeat in 2018, although transaction volume is likely to moderate due to the lack of available stock. HEALTHY INCREASE IN INTERNATIONAL TOURIST ARRIVALS 2017 CBRE Research CBRE Ltd

2 Occupancy (%) Growth in tourist arrivals (%) MARKETVIEW Figure 1: Growth of International Visitor Arrivals by Region 9% 7% 5% 3% 1% -1% -3% -5% World Europe APAC Americas Africa Middle East Source: UNWTO, CBRE Hotels Figure 2: Growth of International Visitor Arrivals (2017 vs. 2016) Vietnam Indonesia Japan Thailand New Zealand Australia Singapore Hong Kong Taiwan South Korea (40.00)% (20.00)% 0.00% 20.00% 40.00% Source: Respective Tourism Authorities, CBRE Hotels Figure 3: Hotel Occupancy in Selected Key Markets in Asia Pacific 95% 90% 85% 80% 75% STEADY GROWTH IN ASIA PACIFIC HOTEL OCCUPANCY 70% 65% Asia Pacific Singapore Hong Kong SAR Tokyo Osaka Sydney Melbourne Seoul 2017 CBRE Research CBRE Ltd

3 Index (2011=100) ADR (ISD) MARKETVIEW Figure 4: ADR Across Asia Pacific (US$) ADR IN LOCAL CURRENCY REMAINS RESILIENT Figure 5: RevPAR Performance across Asia Pacific (Growth in RevPAR 2016 Y-o-Y Local Currency) Seoul Singapore Taipei Osaka Melbourne Tokyo Asia Pacific Bangkok Hong Kong SAR Sydney Ho Chi Minh City Auckland Hanoi (15.0)% (10.0)% (5.0)% 0% 5.0% 10.0% 15.0% 20.0% HANOI LEADS REVPAR GROWTH Figure 6: ADR Performance across Asia Pacific Local Currency (MAT Index 2011=100) NEW HOTEL PIPELINE REMAINS SIGNIFICANT Asia Pacific Singapore Hong Kong SAR Tokyo Sydney Seoul 2017 CBRE Research CBRE Ltd

4 MARKETVIEW MARKET PERFORMANCE OUTLOOK INCREASING SUPPLY OF HOTEL ROOMS IN JAPAN FOR 2020 OLYMPIC GAMES CHINA OUTBOUND TOURISM AND ITS IMPACTS ON TOURISM WITHIN THE REGION HOTEL TRADING CONDITIONS IN SOUTH KOREA AFFECTED BY POLITICAL TENSIONS THAILAND SEES CONTINUING GROWTH MOMENTUM SINGAPORE HOTEL OUTLOOK EXPECTED TO IMPROVE ALONG WITH GROWTH IN VISITOR ARRIVALS 2017 CBRE Research CBRE Ltd

5 Millions MARKETVIEW YEAR OF CHANGE AHEAD FOR AUSTRALIA POSITIVE HONG KONG HOTEL MARKET OUTLOOK AMID GROWTH IN INTERNATIONAL TOURISM HOTEL INVESTMENT MARKET IN 2017 Figure 7: Total Acquisition for Asia Pacific Markets 14,000 12,000 10,000 8,000 6,000 4,000 2, % 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% Source: RCA, CBRE, Dec 2017 Asia Pacific Growth % *Including transactions that are worth more than 10 million USD each, and excluding related-party transactions 2017 CBRE Research CBRE Ltd

6 MARKETVIEW ASIA PACIFIC RESEARCH CBRE HOTELS Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. Agency Licence No.: L I