Since 1997 there have been 120 portfolio transactions  around the globe totalling US$75.0 billion.  Despite a mere 1.7% of this total value comprising portfolios contained within the Asia Pacific region, a number of global giants have established a strong presence in the region�s key markets.  

�This presence was partially acquired through global portfolio acquisitions during the period, which allowed major players such as Accor, Six Continents and Starwood to build a strong brand presence in multiple markets in one swoop� said David Gibson, Managing Director and CEO, Jones Lang LaSalle Hotels, Asia Pacific.  

Those markets in the region considered to be emerging remain dominated by major hotel companies that are locally based, presenting future opportunities.  �As global brands require a presence in these markets, such as China, Korea and Japan, portfolio transactions are likely to be viewed as a cheaper and quicker means of achieving this than organic growth through development� continued Mr Gibson.  

Over half of the value of portfolio transactions that have occurred since 1997 have involved sales prices in excess of US$1.0 billion.  �US buyers have heavily dominated this �Big Hitter� class of investor, swallowing 71.5% of the value of transactions in excess of US$1 billion� stated Mr Peter Barge, Chairman & CEO, Jones Lang LaSalle Hotels.

Investors from the US dominated the global M&A landscape from 1997 to 2000.  �At the height of the capital orgy in 1998, debt was inexpensive and equity readily available.  Major hotel companies took advantage of the public market�s appetite to make offensive moves to either extend their brand presence or acquire brands that would complement their existing stable,� said Mr Gibson.

However, since 2000, the landscape has changed dramatically.  �The US public markets have shied away from perceived high-risk hotel real estate deals and companies have begun to focus on bedding down their existing portfolios, opening the way for European and Asia Pacific investors,� said Mr Gibson.  

Cashed-up through their divestment of non-core assets and strong growth in trading performance, European investors began to take over the reign.  �UK investors accounted for 63.1% of the total value of all portfolio transactions during 2000 before recording a massive 360.4% increase in investment activity ytd 2001,� said Mr Gibson.  

Buyers from the Asia Pacific also made an appearance with Ling Hing Developments� purchase of Aman Resorts in 2000, followed by Raffles� purchase of the Swissotel chain in Europe in 2001.

�The once vastly fragmented industry is seeking to consolidate itself in order to compete more effectively on a global platform,� said Mr Gibson.  �The advantages of a global sales network and diversified market exposure are reaffirmed during turbulent times such as these�.

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