Hotel investment outlook ‘strong’ in EMEA
Dubai, December 31, 2012
Nearly 28.8 per cent of investors are targeting upscale hotel properties for investment in Europe, Middle East and Africa (EMEA), a report said, adding that demand for luxury assets is highest in Dubai, Abu Dhabi and the French Riviera.
Forty per cent of hotel investors are also likely to buy assets over the next six months, with positive buy intentions focused on Germany’s major cities and other key European markets, added the latest Hotel Investor Sentiment Survey by Jones Lang LaSalle Hotels, a provider of hotel investment, advisory and asset management services.
Other cities included London, Warsaw, Vienna, Amsterdam and Paris.
Gabriel Matar, regional director Middle East & Africa Jones Lang LaSalle Hotels said: “Survey results indicate that confidence in hotel real estate is holding up well despite the economic problems in Europe.
“Cap rate requirements remain firm at an average of 7.2 per cent, with keener yields for key gateway markets such as Paris, London and in key German cities where aggressive bidding has driven prices to peak levels. Yield requirements remain higher in Mena. Dubai yield expectations are at 10 per cent.”
The sentiment in this asset class has risen significantly since the last Hotel Investment survey in May 2012, he added.
In the Middle East and Africa, trading performance expectations have improved significantly since the last Hotel Investment survey although the outlook still remains slightly negative for the short and medium term.
The improvement in sentiment is largely due to an overall stabilization in the region since the Arab Spring and tourist flows have started to return to countries such as Egypt and Tunisia.
“Since the downturn of 2009, Dubai hotels have reported a strong recovery in occupancy and average daily rate (ADR) levels,” Matar added.
“In light of a slowing development pipeline and political stability in the country, investors believe that Dubai’s operating fundamentals will continue to improve in the short and medium term. Dubai is the best performing Mena hotel market and is certainly the one to watch in 2013.” – TradeArabia News Service