Investment turns to Asia Pacific

The search for long-term returns was stimulating investment towards the Asia Pacific and Gulf regions, attendees at IHIF Asia heard. 

The comments were made during a panel discussion chaired by Marcena Capital CEO Dhruv Sharma, featuring Global Asset Solutions’ CIO Robert Walters and His Highness Sheikh Saqer bin Omar Al Qasimi, on Global Capital Repositioning in Asia and the Gulf.

Walters said: “What we’re seeing is a fundamental repositioning of global capital towards Asia and the Gulf, driven by the search for diversification, scale and resilient long-term returns.”

He said that it did not represent a flight from Europe, as European investment volumes had remained broadly stable at around €25bn in 2025, but that the stronger motivation was supply constratint impacted by strong, particularly across Northeast and Southeast Asia, where arrival numbers had increased by around 20% to 22%.

Walters identified Japan, China, South Korea, Singapore and Australia as the key gateway markets driving demand from overseas capital in Asia. However, he said that significant yield compression in trophy assets suggested that investors look towards secondary markets including Thailand, Vietnam and Indonesia for added value.

Walters said: “The opportunity is increasingly in the markets with diverse local dynamics at play, emphasizing the need for strong local and regional partnerships.”

Sheikh Saqer outlined Ras Al Khaimah’s strategy of using large-scale master planning to create investable destinations, highlighting Marjan Island, Marjan Beach and RAK Central. He said Marjan acts as a master developer rather than competing with private-sector developers, often committing its own capital first to demonstrate confidence in a project and attract additional investment.

The approach has helped attract significant international capital, with foreign investors accounting for 78% of Marjan’s current investor base. Sheikh Saqer highlighted the $5.7bn Wynn Marjan Island development as a major catalyst for the emirate, with completion scheduled for September 2027. Sheikh Saqer also highlighted that even where Marjan sold land plots without formal partnership agreements, it regarded developers as long-term partners in creating a cohesive destination identity.

The panel also discussed the importance of governance structures in cross-border investment. Walters said international investors and local operators needed clear alignment around “reserved matters” such as capex, re-financing, brand changes etc. which can so often lead to conflict. He referenced Singapore as a preferred jurisdiction for governance contracts because of its stable legal framework, but emphasized the need for clarity in the terms of reference between investors and local partners.

ESG was also becoming an increasingly important component of investment decisions. Walters cited research from Cushman & Wakefield suggesting that eco compliance could add around 5% to an asset’s value, although rising construction costs remained a concern for around two-thirds of investors leading to hesitation to implement some changes or seek accreditation such as BREEAM.

Prior to the event, Global Asset Solutions released its Asia Pacific Hotels Transactions and Market Outlook, with the event highlighting key conclusions in the study.  Vietnam and South Korea were identified as two of the region’s key hospitality growth stories in 2026.Vietnam is benefiting from growth across multiple demand metrics and its positioning as an affordable destination, although a substantial pipeline of new hotel supply could moderate growth from 2027. South Korea, meanwhile, has recorded sustained rate growth but has less new supply coming into Seoul and surrounding markets.

India was also highlighted as a market benefiting from strong economic growth, with pricing expected to remain resilient through 2026 and into 2027 despite significant investment and new brands entering the market. Singapore and Australia continued to attract investors because of their stability and consistent profitability, although individual Australian markets were increasingly being affected by new supply.

Thailand was described as returning to growth following several challenging quarters, although older upscale hotels in Bangkok could come under pressure from new supply. Malaysia was more challenging, with rate growth expected to flatten for the remainder of the year. The Maldives had absorbed the impact of events in the Middle East during April and May, with low-season occupancy of 45% to 50% helping to mitigate the disruption, and was still expected to meet its original budget across its more than 200 resorts.

Japan and China presented contrasting stages of the regional cycle. Japan was increasingly focused on revenue and profit optimisation, with four out of five submarkets recording growth in both occupancy and ADR. A broader mix of domestic and international demand was helping to manage seasonality, although the market continued to require more high-end hotel supply.

China’s recovery remained slower, with only one in five submarkets recording growth and around two-thirds experiencing negative occupancy growth. RevPAR growth was expected to reach only around 1% to 1.5% in 2026, with new supply, discounting and weaker government and SOE spending limiting pricing power.

Chengdu, for example, was facing new room supply equivalent to around 14% to 15% of its existing stock, while high-end hotels in Beijing continued to face pressure on profitability and flow-through. Major Chinese markets including Shanghai, Guangzhou and Shenzhen were expected to experience relatively modest growth through the end of the decade, at around 1% to 2%.

During the Q&A, Walters returned to Vietnam as an emerging investment opportunity, while highlighting challenges around land use, title and governance. He said first-time investors would need established partners with local expertise and strong government connectivity to navigate the market effectively.

The panel also stressed the importance of maintaining sufficient financial flexibility. Sheikh Saqer warned against focusing solely on short-term value or running projects with overly tight cash flows that leave no room to absorb market disruption. For Marjan’s projects, he said expected yields were around 18% for hospitality and more than 30% for residential deals.

Overall, the discussion pointed to the continued interest of global hospitality capital towards Asia and the Gulf, with investors moving beyond established gateway markets in search of growth. The panel emphasised that success in these markets would depend not only on demand growth and asset pricing, but also on strong governance in local partnerships, with disciplined capital structures and long-term destination planning.