Australia’s hospitality sector has experienced a significant rebound in hotel investment volumes in 2025, according to JLL’s latest Australian Hotel Investment Dynamics report.
A resurgence in cross-border capital is driving the recovery, following one of the lowest annual totals in over a decade in 2024.
“Hotel transaction volumes have increased 56% year-to-date June, compared to the same period in 2024, with offshore capital accounting for 45 % of total investment,” JLL reports.
“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.”
JLL Managing Director and Head of Investment Sales for Hotels Australasia, Peter Harper, said Australia is now perceived as a safer market for investment.
“Historically, Australasia has attracted some of the highest cross-border capital inflows across all of APAC,” Harper said.
“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% of Australian hotel investments. This figure dropped to just 28% in the post-Covid period (2022-2024).
JLL Hotels and Hospitality leads the facilitation of cross-border transactions into Australia and New Zealand, celebrating 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,” said JLL/.
“Recent bid intelligence from JLL shows that 58% of total bid volume is currently attributed to foreign capital, primarily from family offices and high-net-worth individuals (accounting for 69% of bid volume), followed by private equity groups (21%) and institutional capital (10%).”
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, according to JLL.
“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,” Harper said.
According to this report, foreign investors currently own approximately 57% of institutional hotel assets across Australia’s five key CBD markets, with Singaporean investors leading foreign ownership at 36%.
JLL forecasts that the strong performance in the first half of 2025 is likely to continue throughout the year.
“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,” JLL said.