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Asia Pacific Watch

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Hotels are considered by many investors to be the "fifth property type," after office, retail, industrial and residential. As the other sectors reprice given strong liquidity and improving fundamentals in much of Asia Pacific, we turn attention in this Watch to the hotel, resort and hospitality sector. The solid economic and demographic drivers of this region support both domestic and intra-regional tourism and business-related travel. Additionally, tourists and business travelers from the other regions have more reason to visit Asia Pacific markets as they assume increasing importance in the global economy and as leading vacation destinations.

With rising demand, so too has there been an increase in accommodation quality as leading global and local brands jockey to operate the best assets in the choice locations. Hotels are typically more volatile than the four main property types. Yet, for reasons of geographic diversification and for the possibility of attractive risk-adjusted returns, we suggest that large global investors consider an allocation to this sector. Some regional/national total return series for hotels have now been developed to guide these allocations and indicate their benefits.

Source : CBRE Global Investors

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