Hotel investments in Hong Kong remain active in 2024, plus more news

For PropertyGuru’s real estate news roundup, Hong Kong’s hotel investment market remains active this year, with buyers opting for city-centre hotels in prime locations. In other stories, residential transaction values in Saudi Arabia surged 25 percent year on year in the third quarter of 2024. Lastly, Phnom Penh’s property market, including retail, has seen no significant improvement since 2019.

Hong Kong hotel investments to reach USD500 million in 2024 – JLL

Asia Pacific hotel investments are expected to total USD12.2 billion for the full year 2024 as an influx of investment activity, a more favourable interest rate environment, and generally supportive macro and microeconomic developments will positively impact regional sentiment in the sector. According to analysis by JLL, full-year Asia Pacific hotel investment volumes in 2024 are anticipated to grow by 4.3 percent over 2023, which totalled USD11.7 billion.

Hong Kong’s hotel investment market remains active this year, but buyers have become more selective, opting for city-centre hotels in prime locations. JLL forecasts volumes of approximately USD500 million in 2024, roughly 35 percent below 2023 levels. Given that this year’s prevalence of wide bid-ask spreads is expected to moderate and tourism in Hong Kong is poised to pick up further, 2025 is projected to see more investment activity.

Oscar Chan, Head of Capital Markets at JLL in Hong Kong, said in The Hotel Conversation: “Currently, Hong Kong is experiencing high vacancy rates in many hotels, particularly in the three- and four-star categories, largely due to changing tourist consumption patterns. The latest Policy Address introduced a pilot scheme to incentivise the conversion of hotels into student accommodation by streamlining the application process for planning, lands and building plans, to encourage the market to convert hotels into student hostels on a self‑financing and privately‑funded basis. This move is expected to stimulate investment interest, attracting more developers and investors to participate and inject new vitality into the market.”

Saudi residential transaction values surge 25 percent in Q3: Knight Frank

Residential transaction values in Saudi Arabia surged 25 percent year on year in the third quarter of 2024, totaling SAR35.4 billion (USD9.4 billion), a new report showed.

According to Knight Frank, the volume of deals also increased by 12 percent, reaching 45,924 deals, highlighting strong demand in the Kingdom’s housing market.

Riyadh led this growth with a 16 percent increase in sale numbers and a 41 percent rise in transaction values compared to the same period of 2023. The city’s strong performance underscores its position as a central hub for real estate activity in the country.

Saudi Arabia’s Vision 2030 aims to boost homeownership to 70 percent by 2030, driving extensive residential development.

Many of these projects are undertaken by ROSHN, a USD20 billion initiative from the Public Investment Fund that aims to deliver over 200,000 homes across the Kingdom.

“With a current supply of 3.5 million units across the Kingdom’s five major cities, we forecast the residential supply to reach nearly 3.7 million units by the end of 2026,” stated Knight Frank in Arab News.

Phnom Penh retail real estate market remains quiet

As of the end of Q3 2024, total retail space in Phnom Penh stood at nearly 770,000 sqm, while the average occupancy rate for the quarter stood at over 58 percent, reflecting a slight decline compared to Q2, according to CBRE Cambodia.

The Phnom Penh Market Insights Q3 2024 report by CBRE noted that retail spaces in the capital spanned over 669,000 sqm. The occupancy rate decreased from 58.7 percent in Q2 2024 to 58.3 percent in Q3. The decline has continued since 2019, particularly during the COVID-19 pandemic peak, when occupancy rates fell below 55 percent in 2021.

Rental prices across the four types of retail spaces – shopping malls, community malls, retail podiums and prime high streets – have dropped between 0 percent and 5.2 percent compared to Q1 2020.

CBRE Cambodia managing director Kinkesa Kim told The Phnom Penh Post on 17th October that the sector, including the retail market, has seen no significant improvement since 2019. She said the industry’s recovery depends on both global and domestic economic growth.

“For the real estate sector to recover to pre-2019 levels, economic activities such as tourism and investment must improve, boosting people’s incomes. Generally, I believe Cambodia’s real estate sector will need at least one or two more years to recover,” she added.

The Property Report editors wrote this article. For more information, email: [email protected].