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 2010 2011 2012 2013 2014 Volume (USD Billions) Global Hotels Transaction Volume 2013 a standout year, 2014 a moderation, 2015? 100 90 80 70 60 50 40 30 20 10 USD % 2014 on 2013 2014 Billions 2013 Americas 25.3 29.0 14.9 EMEA 16.3 20.9 27.8 Asia Pacific 9.4 7.0-25.1 TOTAL 51.1 57.0 11.6 0 Source: JLL Asia Pacific EMEA Americas 1
Asia Hotels Transaction Volume Investment spans regionally across Asia, dominated by Japan and Mainland China 2013 2014 Japan 29% China 17% Thailand 4% China 26% Thailand 7% Asia Balance 10% Source: JLL Singapore 28% Malaysia 1% Maldives 3% Hong Kong 6% Indonesia 2% Japan 41% Malaysia 6% Maldives 4% Asia Hong Kong Balance Indonesia 4% 10% 2% Singapore NIL 2
THB Billions Thailand Hotels Transaction Volume Steady growth of inbound capital into Thailand since 2009, recording THB 13.7 billion in 2014 18 16 14 12 10 8 6 4 2 0 15.2 13.7 10.6 8.5 9.0? 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-3.8-4.7 Airport Closure Source: JLL Military Coup Global Financial Crisis Flood Martial Law 3
THB Billions Property Fund / REIT Property funds / REITs are major players in the market, REITs the game changer 45 40 35 30 25 20 15 10 5 0 27.3? 3.8 6.9 3.4 15.2 0.7 3.6 13.7 8.5 9.0 10.6 2.8 3.8 4.7 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Arm's Length Transactions Corporate Transactions Airport Closure Source: JLL Military Coup Global Financial Crisis Flood Martial Law 4
Thailand Hotels Transaction Volume 2014 Bangkok led investment within Thailand Bangkok 36.1% THB 4.9 B Phuket 9.5% THB 1.3 B Hua Hin 24.3% THB 3.3 B Pattaya 9.3% THB 1.3 B Krabi 20.3% THB 2.8 B Khon Kaen 0.5% THB 0.75 M Source: JLL 5
Global Hotels v. Thailand Transaction Metrics 2014 Thailand represents good buying opportunities when compared regionally Global Asia Thailand Total No. of Transactions Total Transaction Volume (USD Billions) Average Transaction Volume (USD Millions) 990 94 14 57.0 5.0 0.4 55.8 54.7 30.0 Price per Key (USD) 222,000 268,900 182,000 Source: JLL 6
Thailand Hotels Seller/Buyer Profile 2014 Development / property companies contributed to more than 70% of transactions Buyer Profile Seller Profile Hotel / SA Operator Nil Hotel / SA Operator Nil Development / Property Company 70.7% Development / Property Company 45.2% Investment Fund 0.9% Investment Fund 25.4% Corporates 26.6% HNWI 1.8% Corporates 11.6% HNWI 8.2% Undisclosed Nil Undisclosed 9.7% Source: JLL 7
Thailand Hotels Buyer/Seller Origin 2014 The majority of hotel investment in Thailand is by domestic players, Singapore the balance Buyer Seller 13% 87% 100% Source: JLL 8
Notable Thailand Transactions 2014
Hilton Hua Hin Resort & Spa Iconic, beachfront resort acquired by a Thai listed company Month 00, 2014 10
Oakwood Apartments Trilliant Sukhumvit 18 129-key property in central Bangkok with BOI incentive Month 00, 2014 11
Outrigger Phi Phi Island Resort 156-key resort bought out of M-AAA fund by Singha Estate Month 00, 2014 12
Burasari Phuket Boutique resort in central Patong acquired by a Singaporean firm Month 00, 2014 13
Four Points by Sheraton Sukhumvit 15 Internationally branded hotel in the heart of Bangkok Month 00, 2014 14
Dusit D2 dusitd2 Baraquda 72-key hotel located on Pattaya s Second Road Month 00, 2014 15
Outlook for 2015
Number of Visitors (million) Thailand International Visitor Arrivals Despite the political demonstrations, visitor arrivals dropped marginally 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 10.1 11.7 11.6 13.8 14.5 14.6 14.1 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F SARS Military Coup CAGR 7.8% 15.8 Number of Visitors (million) Global Financial Crisis 19.2 22.4 26.5 24.8 Martial Law 28.0 25% 20% 15% 10% 5% 0% -5% -10% Annual Growth (%) Boxing Day Tsunami F: Forecast Source: Office of Tourism Development, Department of Tourism, JLL Airport Closure Floods 17
Destinations to Watch 2015 Bangkok supply and demand coming into balance with tourism growth returning to long term historic trend Phuket a destination on its own, developing infrastructure and new direct flights Chiang Mai cultural tourism, direct connection to Mainland China and lower ADR s Pattaya proximity to Bangkok, improving image as a family destination and attractive investment opportunity Month 00, 2014 18
Outlook 2015 Domestic REITs set to become active investors in hotels with a number of listings expected Capital to remain dominant from local investors whilst international buyers start to return to market on improved trading prospects Lifting of Martial Law will underpin the recovery of inbound tourism and hotel performance Limited deal pipeline, total sales volumes to moderate, between THB 13-14 billion 19
Thank you 20