Speakers at the recent International Hotel Investment Forum said to expect more European transactions with Asian capital as the key players.

Representatives of Asian capital who participated in “The rise of the Asian investor” panel said investors were required to put in a few years of relationship-building, but now that period is over, and European deals are now closing much quicker.

Teddy Zhang, managing director at The Thayer Group and chief advisor of Phoenix Global Investment—who was deeply involved in the deal that saw Shanghai Jin Jiang International buy Louvre Hotels Group—said there is “strong will from Chinese companies to go overseas, particularly from Jin Jiang. Once we had a couple of years getting to know (Louvre), the deal was actually completed in five days.”

Jin Jiang owns the largest minority stake in French hotel firm AccorHotels to 11.7%, Zhang said, after the company twice in 2015 raised its stake in AccorHotels.

Sanjay Singh, managing director of Fico Corporation, which formed a joint venture with Singha Estate to buy United Kingdom white-label management company Jupiter Hotels Limited, lives in an equally speedy environment.

“Joint ventures give us more confidence to work in new markets,” Singh said, adding that the company is open to working with new partners.

Singh said the decision to buy Jupiter last September has made in 20 minutes, and within 24 hours Fico proceeded.

“Everyone said, ‘This just makes sense,’” Singh said.

With some Asian companies having a vested interest in owning other parts of the customer journey, there is great upside in scooping up hotel assets, according to sources.

Roc Huang, board director and executive deputy GM at HK CTS Hotels Company Limited, which acquired fellow U.K. white-label management company Kew Green Hotels last August, said theacquisition was its second attempt to buy a European portfolio.

“We have 600 travel agencies in China,” Huang said. “We own and operate 85 or so hotels there. We also purchased a bank two years ago, so we longed for children in Europe, but initially we did not understand the rules of the game.

“We tried to introduce ourselves to the market, but that takes time, to prove that a deal can be closed within the required time and to appoint professional advisors. But once we opened a bank account in the U.K., the deal was closed quickly.”

There seems no end to Asian investor appetite, panelists said.

“The awareness of (HK CTS) increased, and we were presented with other deals, not only in Europe but around the rest of the world,” Huang said. “Kew Green is the first stab at our overseas expansion plan. We will acquire more, especially with the easing of travel visas.”

Huang added that in 2015 his company sent 30,000 Chinese travelers to the U.K.

Zhang said the Chinese middle class could soon grow to between 300 million and 400 million people.

“We do not have a plan to dominate the world, but rather concentrate on strategic locations,” Huang said. “We want to be a Fortune 500 company, so we are disposing of some non-core business, such as power plants, but we are acquiring, too. The plan is to bring the Metropark brand to the West eventually, but not in the short term.”

Zhang hinted that Chinese money still felt most comfortable at the very high end of the hotel market.

“We want to work with international players. … Chinese companies still have challenges in ownership outside of the top end,” Zhang said.

Chinese ownership perspective
One of the four panelists was Pierre-Frédéric Roulot, chairman and CEO of Louvre Hotels Group, which is now owned by Jin Jiang. Roulot said the company’s portfolio is ready to be bolstered and expanded by its rising guest list of Asian travelers and increased Asian capital.

“How have things changed under Chinese ownership?” Roulot said. “After one year, life has changed completely. They believe in brands and in our brands and have other interests, notably transportation. Jin Jiang has given us the power to continue to develop on our own in Europe, and it was very quick. Plus there is the €2.5 billion ($2.8 billion) (they gave us) to spend over the next three years, which could be spent in other niches such as hostels and clinics.”

Roulot said the smart thing to do is for Asian companies to stop investing in Asian markets, now that Asian travelers are flocking to Europe.

“We worked very hard in the past to crack China with no success, but now, that is all different,” Roulot said. “We could have 200 hotels, even 500, in China. … Now Chinese travelers are the key thing for European hoteliers. They are spending more and more in hotels and demand a better product, and they are coming to us from Jin Jiang.”

Europe will continue to be Asia’s preferred hunting ground, panelists said.

“We think market valuation in places such as the (United States) peaked last year,” Zhang said.

Source: http://www.hotelnewsnow.com/Articles/34344/Asian-investors-look-to-buy-quickly-in-Europe