Fiji is on the brink of significant growth in the Asia Pacific real estate market, according to Nick Thompson, Hotels and Hospitality Director at JLL New Zealand.
Speaking at a recent tourism investment conference, Thompson outlined Fiji’s robust tourism recovery, the promise of domestic and emerging Indian markets, and the shift towards high-net-worth investments as potential drivers of this growth.
He highlighted the impressive rebound of Fiji’s tourism sector. Fiji welcomed 900,000 visitors last year, a number well above the pre-COVID levels of 2019.
Thompson believes that Australia and New Zealand view Fiji as a domestic market, which significantly contributes to the increase in tourist numbers, but also says that India is untapped market.
“It’s a vast market throughout Asia Pacific, and Fiji needs only a tiny portion of that to make a substantial difference.”
With a significant Indo-Fijian community familiar with Indian culture and business practices, the focus on increasing airlift from India could further boost tourist numbers.
Investment trends in the region also indicate a positive outlook. Thompson noted a shift towards high net-worth investors and family (private businesses) looking for investment opportunities in Fiji, driven by favourable economic conditions.
“There’s a lot of private equity money sitting out there, and Fiji offers a compelling opportunity with positive carry rates,” he explained.
The country’s first mortgage rates are around 3.95%, while cap rates for hotel investments can reach up to 11%, making it an attractive proposition for investors.
Despite global uncertainties, such as geopolitical tensions and economic headwinds, Fiji remains a safe and appealing investment destination.
Thompson observed, “Fiji, along with New Zealand and Australia, is far removed from the turmoil in other parts of the world, making it a preferred location for investors.”
Fiji’s market performance has been remarkable, he notes, with near-full occupancy rates and average daily rates (ADR) surpassing pre-COVID levels.
“We’re seeing mid-to-high 90% occupancies across the market,” Thompson shared.
He noted ADR is currently at 125% of pre-COVID levels.
However, challenges remain, particularly in the branding of hotels. “One of the interesting issues in Fiji is the spread of brands.”
He says 71% of hotels lack a global brand, and this presents an opportunity for franchising and the introduction of international brands, which could enhance the market’s appeal and performance.
He encouraged stakeholders to explore these opportunities, stating, “the major players are ready to do business”.
Future supply in the hotel sector is also promising, with several developments in the pipeline.
“There’s a lot of development available, and many properties have potential for expansion,” he said.
Thompson also encouraged confidence in the market despite some softening trends.
“Let’s keep pushing the ADRs. People love it here; it’s easier and safer. Fiji’s competitive advantage, combined with the increasing focus on ESG (Environmental, Social, and Governance) principles, positions it well for future growth.”
