According to Jones Lang LaSalle (JLL), in the first three quarters of 2026, hotel investment transactions in mainland China reached 12.4 billion yuan, up 22.5% year on year, as overall willingness to invest in hotel assets through block trades continued to rise.
At the regional level, East China remained firmly in the top tier for hotel transactions, accounting for 42% of total hotel deal value in mainland China, while transaction activity in North China and the central and western regions increased markedly.
As distressed real estate developers push forward with asset disposals, hotel assets from judicial auctions and bankruptcy reorganizations have continued to be released, with targets mostly concentrated in strong second-tier cities, further expanding the pool of tradable assets. Investors have also begun to seek discount opportunities in non-performing assets, provided that risk controls are adequate.
In terms of investment preference, small and medium-sized projects valued at no more than 500 million yuan were generally welcomed by the market, as such projects require less upfront capital, carry controllable financial risk and have shorter return cycles, matching current investor demand for risk aversion. In the first three quarters, the number of transactions in this bracket surged 73.3% year on year.
The buyer landscape has also changed noticeably, with high-net-worth individuals rapidly becoming an important force in hotel asset acquisitions, accounting for 32.3% of total transaction value, and favoring high-quality targets in first-tier cities priced at no more than 500 million yuan per deal. Corporations and state-owned enterprises were also active, with domestic capital becoming the core driver of transactions.
Policy tools continue to improve as hotel investment enters a new development environment
At the same time, the gradual advancement of hotel REITs has continued to broaden exit channels for hotel assets, pushing the investment logic from a focus on land appreciation toward cash flow returns. It will also continue to promote the institutionalization of hotel assets, provide reliable exit channels for assets and improve medium- to long-term liquidity.
Guangzhou, Shanghai and other places have successively introduced new policies on industrial and commercial land lease renewals, clarifying renewal conditions and costs. This has effectively mitigated the impairment risk for properties with remaining land terms of 10 to 20 years and eased investors' long-standing concerns about land expiry.
As valuations correct to attractive levels, foreign private capital, especially Middle Eastern capital, has also begun to re-examine opportunities to acquire high-quality hotels in China.
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