Hotel investment reactivates, exceeds €1,000 million until June
By Mas Property
on Sun Jul 18 2021
Investment in the hotel sector has reached 1,094 million euros in the first six months of the year, thus exceeding the level reached in the entire previous year, of 955 million. In addition, it is one of the best semi-annual records of the last 15 years.
“Investment has been reactivated with extraordinary force”, say the experts at Colliers, who anticipate “very positive” prospects for the second half of the year, with ongoing operations of approximately 2 billion euros , of which about half are corresponds to transactions already agreed or very advanced, according to Colliers International.
With this, “the extraordinary slowdown in investment that occurred in 2020 as a result of the impact of covid-19 on the tourism sector seems to be behind us ,” the company that provides advisory and investment management services in real has highlighted.
Between purchases of existing hotels , buildings to be converted into a hotel and land for hotel developments, a total of 52 operations (7,333 rooms) have been closed.
The data for Spain contrast with those of other neighbouring countries such as Germany, the Netherlands or the United Kingdom, with investment levels still at a minimum .
The reason that Spain is one of the countries of maximum investment interest is that international investors believe that the hotel market for leisure will recover much earlier than the business market , and a good part of the Spanish hotel plant, mainly in the vacation area, continues to be owned by the chains.
Approximately 60% of investment in the first half of 2021 was concentrated in vacation assets, compared to 40% that monopolized the urban segment.
The perfect Storm
In the hotel investment market in Spain, there has been a combination of different elements that have made up “the perfect storm”, according to Laura Hernando, CEO of Colliers’ Hotels division.
Historically high levels of available liquidity have been coupled with great pressure from funds to invest ” after a 15-month drought, and the absolute need for many hotel chains to divest assets as a way to cover the significant liquidity gap generated by the impact of covid-19 “, he explained.
In addition, all this is taking place in a context of limited availability of financing for acquisitions, which suggests that investment activity will multiply as financing begins to flow, he added.
From the buyer’s point of view , during the first half of the year investment funds have predominated, with operations such as the purchase by Archer Capital of Edition Madrid; the recent acquisition of the NH Collection Calderón de Barcelona by LaSalle Investment, or Bankinter (jointly with private banking clients of the entity), acquiring a portfolio of 8 hotels owned by Meliá Hotels International.
Among the operations in the second part of the year, the sale of the Gran Hotel Central de Barcelona by Único Hotels to Schroders, announced in the first days of July, and the move made by Riu Hotels & Resorts to acquire the minority position (49% ) held by TUI in its ‘joint venture’ -which includes 21 hotels, of which 8 are located in Spain- and which will be formalized shortly.
Added to these are the sale of the Tryp Apolo in Barcelona and the hotel portfolio owned by Selenta Hotel Group , in addition to the new market launch of the Ayre Hoteles portfolio and multiple operations on individual assets currently underway.