Indian hotel market rebounds but institutional investment remains weak

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India’s hospitality market is enjoying a strong recovery driven by domestic demand, but is at an “embryonic stage” compared to other Asia-Pacific markets to attract institutional investment, Nihat Ercan, Senior Managing Director, Asia -Pacific, at JLL Hotels & Hospitality, aa said.

Across the Asia-Pacific (Apac) region, JLL forecast $10.7 billion in hotel transactions this year, up 15% from last year, with India’s share remaining minimal.

“When you look at Apac versus the US and Europe, that’s about 15-20% of global trading volumes,” said Ercan, who is also head of Asia-Pacific investment sales at JLL. Hotels & Hospitality. Australia, Japan, China and South Korea account for 70-80% of deal volumes in the region, mainly due to their institutional investor base and strong domestic demand, he said. declared.

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“Throughout Covid, all of these markets have done well due to strong domestic demand, which also exists in India,” Ercan said. “However, they have a very strong institutional investor base that the Indian market doesn’t really have, or it’s still in its infancy compared to those markets.”

Another driver of activity in the four most active hotel investment markets has been alternative use, he said. “In entry markets like Sydney, Melbourne, Tokyo and Seoul, there has been a trend to convert hotels into multi-family use or into residential or co-living products. Assets are being converted for optimal use,” Ercan said. .

Jaideep Dang, Managing Director, Hotels and Hospitality Group, South Asia, at JLL, said the scale of investment in the sector is much lower in India compared to Australia, Japan and Korea, both in terms of inventory availability than institutional capital for hotels.

Family offices, high net worth individuals and private equity players are showing interest, he said.

“Over the past six months, we have seen a trade of around $120 million. This has been done largely by JLL. India’s number looks small compared to the Apac level. from india, it encourages you that things have started. Trade is about green sites, brownfields as well as operating assets. Are people still facing stressful situations? Maybe that no.

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