Between 9-11 September 2024, Hong Kong will host the inaugural International Hospitality Investment Forum (IHIF) Asia, drawing key players across the hospitality industry. This year’s speakers include senior representatives from: Gaw Capital, Ares Management, Hilton, Radisson Hotel Group, and many more. Not only will you hear from leading hotel investment executives, but the multiple networking opportunities mean you’ll be able to capitalise on the return to dealmaking we are seeing this year.
You can book your ticket here.
With a growing number of institutional investors turning their attention to hospitality real estate across Asia, new destinations are emerging and established ones are seeing renewed interest. Among the notable speakers at IHIF Asia 2024 is Corey Hamabata, managing director at Rockpool Capital and TREC Hospitality, who sat down with Hospitality Investor to provide unique insights into the investment landscape across the Asia-Pacific region.
Hamabata will be participating in a panel discussion titled ‘Institutional & Private Equity Capital: Unlocking Returns, Partnering and Deal Execution Strategies for Success’ (Tuesday, September 10, 2024, 4:10pm-4:40pm).
Hospitality Investor: What was the thesis behind creating TREC Hospitality Investment and how does it fit within Rockpool Capital?
Corey Hamabata: The background of creating TREC Hospitality Investment was that we were witnessing a growing number of institutional investors allocating to hospitality real estate in Asia and at the same time there was a lack of in-house specialization and a lack of proper alignment amongst stakeholders in the investment market. Our thesis was to set up TREC to bridge that gap by providing specialist sourcing, analysis and execution capabilities, whilst creating meaningful alignment through co-investment. This is framed by the broader backdrop of Asia’s commercial real estate market, where you are seeing a proliferation of specialist strategies (i.e. regional logistics, co-living, student housing, data centres, etc.) being funded by institutional capital. We feel it is only a matter of time for this to move more meaningfully into the hospitality space.
Hospitality Investor: Which segments (luxury, midscale, budget, etc.) are seeing the most growth and why?
Corey Hamabata: Asia is a big place so it is hard to make generalizations that apply to the entire region; however, I will say that it appears midscale hospitality saw a lot of building across numerous markets in the past cycle. Many markets already have a depth of supply in this space. Luxury is always a bit slower to add supply and while you have pockets of oversupply in select markets, its generally still relatively under-supplied because the barriers-to-entry are greater. I’m a huge fan of the various spaces that occupy the void between midscale and luxury which we might refer to as Lifestyle. Of all the lasting effects from Covid, I think the most enduring is and will continue to be an acceleration of interest in experiential travel, creating opportunities for hotel properties to define themselves and speak directly to their core customers.
Hospitality Investor: Which emerging markets in the Asia-Pacific region do you find most promising for hotel investments?
Corey Hamabata: It’s hard to call it emerging at this point but I think Thailand continues to be promising. Not only to they have a diversity of unique and interesting destinations, they have a deep labour pool, ingrained culture of hospitality, and importantly a reasonably established investment regime. There are many interesting markets which I enjoy as a traveller but ultimately hold reservations as an investor because the investment environment is either significantly unequal or too difficult to navigate as a foreign investor.
Hospitality Investor: How easy is it to source deals at the moment?
Corey Hamabata: In my opinion, generating deal flow is not the limiting factor right now. As is common in Asia, everything is for sale at the right price. Frankly, the challenge initially was sorting through the bulk of deal flow to determine what is and isn’t investible, especially with finite resources. Over time, we have developed investment themes across various markets and segments which we feel are interesting from a returns standpoint and scalable. From time-to-time, themes may become crowded and the returns may ultimately get crowded out; however, we are always exploring new themes to move into and are also able to look laterally and apply them across different markets which I believe is one of the most important strengths of being a regional specialist investor.
Hospitality Investor: What are your primary sources of funding for hotel investments in the Asia-Pacific region?
Corey Hamabata: We are affiliated with multi-family office, Rockpool Capital, and also look to partner with institutional investors on an opportunity-by-opportunity basis. Capital flexibility is important to us because the nature of the hospitality real estate markets across Asia are very fragmented. This allows us to target areas in the sector we believe are most interesting from a risk-reward standpoint and then match the opportunity with the right capital sources.
Hospitality Investor: What are the biggest challenges when it comes to investing in Asia?
Corey Hamabata: It’s a big, diverse region with different cultures, demographics, legal regimes, etc. Coming from the U.S. market, where I began my career, it is easy to take for granted the level of information transparency in the real estate space and the depth and efficiency of the financial markets. Of course, it is also precisely this lack of transparency and inefficiency that can prove to be sources of alpha, which is one of the reasons that makes this region so interesting.
Hospitality Investor: The theme of this year's event is "Charting New Horizons". What do you think are the biggest opportunities in hotel investment in the region?
Corey Hamabata: Thematically, there are so many things to be excited about for the region. New destinations continue to emerge across the region and many established destinations are seeing a renewal through reinvestment and new development. I mentioned earlier the lifestyle space as being an interesting thematic for us. In addition to that, we think there are opportunities in many of the resort markets which are still quite fragmented as well as in the resort residential / vacation ownership space.