Foreign investors return, as Australia reclaims position as APAC investment powerhouse
JLL’s latest Australian Hotel Investment Dynamics report reveals a significant rebound in hotel investment volumes in 2025, with a resurgence of cross-border capital driving the recovery in Australia’s hospitality sector following one of the lowest annual totals in over a decade in 2024.
Hotel transaction volumes have increased 56 per cent year-to-date June, compared to the same period in 2024, with offshore capital accounting for 45 per cent of total investment. This marks a decisive shift in market momentum, as international investors are once again recognising Australia’s appeal as a stable and transparent investment destination.
In a significant milestone for the Australian hotel market, the country has overtaken China (including Hong Kong) to record the second-highest total transaction volumes in Asia Pacific, behind only Japan as of Q1 2025.
“Historically, Australasia has attracted some of the highest cross-border capital inflows across all of APAC,” said Peter Harper, JLL Managing Director and Head of Investment Sales for Hotels Australasia.
“After a period of reduced international activity, we’re seeing foreign investors now pivoting back to Australia for its ‘safe haven’ status, through its economic resilience, transparency, perceived attractive value, and positive outlook.”
The report highlights that pre-COVID (2017-2019), cross-border capital represented 55 per cent of Australian hotel investments. This figure dropped significantly to just 28 per cent in the post-COVID period (2022-2024), demonstrating the dramatic impact of the pandemic on international investment flows.
Owing to its unique and extensive dedicated Asia Pacific platform, JLL Hotels & Hospitality continues to lead the facilitation of cross-border transactions into Australia and New Zealand, facilitating several landmark or record-breaking deals already this year.
The top five offshore capital sources over the past 18 months have been Thailand, Singapore, China, Canada, and the USA, with Asian investors in particular pivoting their focus back to Australia after previously targeting the UK, Europe, and Japan.
Recent bid intelligence from JLL shows that 58 per cent of total bid volume is currently attributed to foreign capital, primarily from family offices and high-net-worth individuals (accounting for 69 per cent of bid volume), followed by private equity groups (21 per cent) and institutional capital (10 per cent).
A weaker Australian Dollar, which recently hit a five-year low against the USD, GBP, Euro and SGD, combined with a favourable interest rate outlook and declining borrowing costs, has created an exceptionally attractive environment for offshore investors. This currency advantage provides international buyers with increased purchasing power in the Australian market.
“The combination of Australia’s political and economic stability, market transparency, positive population growth outlook, strong tourism sector, and availability of freehold title creates a compelling investment case for international capital seeking secure returns,” Mr Harper added.
The report reveals that currently, foreign investors own approximately 57 per cent of institutional hotel assets across Australia’s five key CBD markets, with Singaporean investors leading foreign ownership at 36 per cent. This demonstrates the long-standing confidence international capital has placed in the Australian hospitality sector.
Many of Australia’s premium-priced hotel assets are owned by offshore groups, predominantly from Asia but also the Middle East and the Americas. Given the relatively limited supply of premium hotel assets in Australia’s major markets compared to the rest of the region, these trophy properties in key gateway cities have created significant scarcity value that continues to attract both domestic and international investors.
JLL forecasts that the strong performance in the first half of 2025 is likely to continue throughout the year, with Australia firmly back in the spotlight for international investors. The combination of favourable economic conditions, attractive yield spreads compared to other global gateway markets, and Australia’s reputation as a safe and transparent market is expected to drive further cross-border investment activity.
This resurgence in offshore capital is providing much-needed liquidity to the Australian hotel market, supporting transaction volumes, and potentially driving further price discovery across the sector.
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