Hotel Investment in Thailand

Thailand Tourism Forum 2012

Mike Batchelor
Managing Director, Investment Sales
Jones Lang LaSalle Hotels
2 February 2012
GLOBAL HOTELS TRANSACTION VOLUME
Market peaked in 2007, recovery has continued in 2011

120

100

80
US$ Billions

60

40

20

-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Jones Lang LaSalle Hotels Q1 Q2 Q3 Q4

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GLOBAL HOTELS TRANSACTION VOLUME 2010 vs. 2011

35
-24%
$1.1
30
$4.0
$1.5
+48%
25
$2.7

$10.9
20
US $Billions

$10.4 +5%
15

10

$15.2
$12.2 +24%
5

0
2010 2011
Americas EMEA Asia Australasia

Source: Jones Lang LaSalle Hotels

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 REGIONAL INVESTMENT ACTIVITY 2010 and 2011
Investment activity spanned a wide range of markets

2010 2011

Vietnam Vietnam
Thailand 0.3% Thailand 1.5%
Taiwan 6.6% 5.2%
Taiwan
5.1% 7.7%
China South Korea
17.9% 0.8% China
Singapore 22.9%
11.9%

Philippines
0.6%
Hong Kong Hong Kong
Maldives 16.0%
1.6% 10.2%
Singapore
India
Malaysia 34.7%
0.7%
5.6%
India Japan
Japan
14.4% 14.2%
20.2%
Indonesia
1.3%
Malaysia
0.6%

Source: Jones Lang LaSalle Hotels

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HOTELS TRANSACTION VOLUME IN THAILAND
2011 outpaced 2010 in volume by more than 50%
18.0
15.9
16.0

14.0

12.0
(In THB billion)

10.0
8.4
8.0 7.2

6.0 5.5
4.1
4.0

2.0 1.5

-
-
2005 2006 2007 2008 2009 2010 2011
* Individual Transactions of + THB 300M / 10M USD each

Source: Jones Lang LaSalle Hotels

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HOTELS TRANSACTIONS IN THAILAND
Where are investors buying?

2010

Phuket
THB 3.9B
72%
2011
Koh Samui
THB 1.5 B
28%
Phi Phi Island, Bangkok
THB 2.12B THB 4.0 B
25% 48%

Koh Lanta,
THB 0.3 B
4%
Pattaya Phuket
THB 0.5B THB 1.5 B
6% 17%
Source: Jones Lang LaSalle Hotels

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INVESTOR ORIGIN & PROFILE DURING 2011

Investor Locations Investor Profiles

Thailand
17%

Thai Property Fund

27%

Hong Kong Private Equity

16% 43%

Singapore
67% Family Based Private
Investor
30%

Source: Jones Lang LaSalle Hotels

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NOTABLE THAILAND HOTEL TRANSACTIONS
Laguna Beach Resort, Phuket

Location Phuket

Date Exchanged February 2011

Seller Laguna Resorts & Hotels

Buyer Laguna Phuket Club

Number of Keys 254

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NOTABLE THAILAND HOTEL TRANSACTIONS
Sofitel Silom, Bangkok

Location Bangkok

Date Exchanged March 2011

Seller LaSalle Investment

Management
Buyer Hong Kong Fund

Number of Keys 469

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NOTABLE THAILAND HOTEL TRANSACTIONS
Somerset Park Suanplu, Bangkok

Location Bangkok

Date Exchanged September 2011

Seller Park Suanplu Holdings

Buyer Oriental Holdings

Number of Keys 235

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NOTABLE THAILAND HOTEL TRANSACTIONS
Mercure Hotel Pattaya

Location Pattaya

Date Exchanged November 2011

Seller Econolodge

Buyer Heeton Holdings

Number of Keys 245

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NOTABLE THAILAND HOTEL TRANSACTIONS
White Orchid Hotel, Bangkok

Location Bangkok

Date Exchanged October 2011

Seller Thai Investor

Buyer Private Singaporean

Number of Keys 330

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NOTABLE THAILAND HOTEL TRANSACTIONS
Phi Phi Village Beach Resort & Spa

Location Phi Phi Island

Date Exchanged November 2011

Seller Private Investor

Buyer MFC Property Fund

Number of Keys 112

White Orchid Hotel, Bangkok

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STATE OF PLAY
Thailand Hotel Investment Market

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INVESTING IN THAILAND

Strengths
Brand Thailand / high percentage of repeat
visitors
Represents value / capital growth potential
Resilient tourism arrivals / destination
Affordable tourist destination
Weaknesses
Foreign ownership restrictions
Limited town planning control / licensing
issues
High cost of debt
Infrastructure planning and spending
Transparent legal system

Opportunities Threats
3 billion people within 4 hours flight Emerging destinations such as Vietnam,
Growth in room rates and occupancies Cambodia, and Myanmar
Pending REIT legislation Political instability
Large scale investment from neighbouring Supply, supply, & supply
countries i.e. China and India Global opportunities of distressed assets

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PROPERTIES CURRENTLY FOR SALE
Movenpick Resort & Spa, Karon Beach, Phuket

362-key resort
Established resort located a few steps
away from Karon Beach
Approximately 52 rai site area
Freehold title
High yielding investment

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PROPERTIES CURRENTLY FOR SALE
Six Senses & Evason Hua Hin

240 guestrooms and villas

Established resort
Set on 80 rai of tropical
parkland
Vacant possession

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PROPERTIES CURRENTLY FOR SALE
Pattaya Hotel

250-key hotel
Central location in the heart of
Pattaya City
Set on approximately 3 rai
Vacant possession
Refurbishment opportunity

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 ASIAS MOST RESILIENT MARKET? BANGKOK
RED SHIRT FLOODING
DEMONSTRATION
22 COUP
25%
AIRPORT
20 TSUNAMI CLOSURE 19.1
GFC 20%
18
15.8
16 9/11 14.5 14.6 15%
SARS 13.8 14.1
Number of Visitors (million)

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Annual Growth (%)

11.7 11.6 10%
12 10.9
10.1 10.1
10 9.6
8.7 5%
7.8
8
6 0%

4
-5%
2
0 -10%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

No. of Visitors (million) Annual Growth (%)

*F:Forecast
Source: Office of Tourism Development, TAT, Jones Lang LaSalle Hotels

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Thank You!

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