Hotel Investment Exceeds €1,000m In 2014

16 January 2015 – Expansión

Record year for hotel investment in Spain.

In 2014, 50 hotels including 8,861 rooms were bought and sold, an increase of 80% or €838 million on the previous year. Furthermore, €243 million was spent on the acquisition of 10 buildings in Madrid and Barcelona with the aim of converting them into hotels, mostly five star accommodation. Overall, total hotel investment rose by 37%, to €1,080 million, which represents not only a return to pre-crisis levels, but also the third greatest year-on-year increase of the last two decades, according to an in-depth market study conducted by the consultancy firm, Irea.

The holiday segment accounted for 59% of all transactions (€491 million), with a focus on three and four star hotels, which together represented 62% of the total volume. “The five star category, which has traditionally formed the core segment, declined in importance”, said Miguel Vázquez yesterday, the partner at Irea responsible for the hotel sector. In this respect, 2014 was a year in which single asset sales played a small role, with the exception of the sale of the Intercontinental Hotel in Madrid to the Qatari firm, Katara Hospitality.

The Balearic Islands, Madrid and Barcelona were the preferred regions for investors, who mainly acquired individual assets. Similarly, there was a significant increase in distressed transactions, as a result of financial problems for sellers, which accounted for 32% of all deals.

2014 was also an important year for transactions involving portfolios of hotel debt. Debt amounting to €1,003 million relating to 93 hotels was transferred in transactions with Octopus, Meridia and Amazona. Irea predicts that these types of operations will continue in 2015 and that the hotel investment figures may exceed those recorded in 2014.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake