EMEA hotel investment surges to $5.53bn
London, October 26, 2010
The hotel investment market in the Europe, Middle East and Africa (EMEA) region demonstrated strong growth in the first three quarters, reaching a record 3.97 billion euros ($5.53 billion), said a report by Jones Lang LaSalle Hotels.
The hotel investment volumes across EMEA registered a 55 per cent year-on-year increase against the 2.5 billion euros ($3.48 billion) transacted between the first and the third quarter in 2009, according to the new report.
As forecasted by JLL Hotels, the growth accelerated further during the third quarter with 1.8 billion euros transacted across region, a significant 70 per cent increase when compared to 1.056 billion euros netted in the third quarter of 2009, said a top official.
“Sellers are now more realistic about their pricing expectations and this has helped kick start the market following a very quiet period. We currently have a reasonable balance between the number of buyers and the stock of hotels on the market,' remarked Mark Wynne Smith, CEO for EMEA at Jones Lang LaSalle Hotels.
'We have also seen a number of distressed sales complete which has given us a good sense of how buyers price when they have a highly motivated seller. Acquisition debt is however is still scarce,' he added.
According to him, the UK has been the most active market so far this year, with over €1 billion of investment transacted, followed by France with approximately €505 million invested. Spain came third with €291 million transacted.
Although confidence and activity in the hotel investment market has started to return, some levels of uncertainty remain with investors continuing to concentrate their activities on domestic deals subject to lease agreements, Smith pointed out.
Nevertheless, an increasing number of hotels with a management contract have transacted during the year, currently representing a share of almost 28 per cent, compared to only five per cent in the full year 2009, the report stated.
'We also saw US investors return to the EMEA hotel investment market - they currently represent a 20 per cent share of volumes, compared to 6 per cent for the full year 2009. Domestic investment remained dominant, although its share fell from nearly 59 per cent in the full year 2009 to 36 per cent in the first three quarters of 2010,' Smith said.
According to him, JLL Hotels had predicted a marked rise in EMEA investment levels in the second half of the year and this is now clearly in progression.
'As a result, we have adjusted our 2010 transaction volume projection by 1 billion euros to 5.5 billion euros, which would represent an increase of more than 76 per cent compared to 3.12 billion euros last year,' he added.-TradeArabia News Service