News roundup: South Korea is APAC’s top performing hotel market, plus other stories

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For PropertyGuru’s real estate news roundup, Asia Pacific’s top performing hotel market for the past two years is South Korea. In other updates, home loan rejections caused a dip in Thailand’s housing transfers in the first quarter, while private investors are stepping back into Australia’s office market as they capitalise on the shift in values.

South Korea is Asia Pacific’s top performing hotel market

According to CBRE in The World Property report, strong domestic and international demand has established Korea as one of the top-performing hotel markets in the Asia Pacific region over the past two years.

STR data indicates that the Average Daily Rates (ADRs) in Korea reached KRW214,177 in Q1 2024, a 43 percent increase over Q1 2019, with overall RevPAR 49 percent higher than during the same period. Although full-year occupancy has yet to fully recover, Q1 2024 occupancy was 2 percent above that of Q1 2019.

The recent robust performance of the hotel sector is expected to be further bolstered by long-term growth drivers such as the Korean Wave (Hallyu) and a burgeoning medical tourism industry. According to the Korea Tourism Organization, nearly 37 percent of travelers to Korea in 2023 cited the Hallyu wave as a major factor in their decision to visit, and medical tourism arrivals reached a record high of 616,000 in 2023.

The luxury and upscale hotel segments are anticipated to lead the market over the next six to twelve months, particularly in key tourist locations like downtown Seoul, Haeundae in Busan, and Jeju Island.

Loan rejections cause drop in Thailand housing transfers in Q1

Home loan rejections caused a dip in housing transfers nationwide in the first quarter, dropping to the lowest point in six years and marking five consecutive quarters of decline.

Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said nationwide residential demand contracted in the first quarter, with transfers declining 13.8 percent year-on-year, totalling 72,954 units.

“The first-quarter decline not only persisted from the first quarter of 2023, but also indicated a further decline YoY, following decreases of 0.8 percent, 4.4 percent, 6.9 percent, and 12.7 percent in the first, second, third, and fourth quarters of last year,” he said in Bangkok Post.

The value of transfers decreased by 13.4 percent to THB209 billion, marking three consecutive quarters of YoY dips since Q3 of 2023, down 2.6 percent in the third quarter of last year and 9.7 percent in the fourth quarter.

Private investors cashing in on Australia’s office space

Private investors are stepping back into the office market as they capitalise on the shift in values, while larger institutions are either selling down or out of the market.

Despite a relatively quiet period, market players are now hopeful that the gap between buyers and sellers is closing, and more transactions are starting to get done.

Wealthy individuals and companies are taking advantage of “repricing” in the office market as they dominate commercial transactions this year, with institutional investors largely on the sidelines.

In a report, real estate agency Colliers’ latest research shows a total of 15 commercial assets were offloaded nationally in the first quarter of this year, with a total value of AUD719 million – up 71 percent compared to the same period in 2023.

Colliers director of investment services Matthew Meynell said institutional groups had been selling non-core assets more frequently in the past year while private buyers scrambled to reap the benefits of the high yields on offer.

“We’re seeing our institutional buyers selling and our private buyers and owner-occupiers being the larger buyer group,” Mr. Meynell said.

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