13 October 2015 – Expansión
Hotel investment is soaring in 2015. During the 9 months to September 2015, 77 transactions were closed involving 15,800 rooms, with deals ranging from the sale of hotels (already in operation) to the conversion of buildings into hotels. Investment volume amounted to €1,237 million, an increase of 54% compared with 2014, according to data published by the consultancy Irea.
Nevertheless, despite the record figures, the pace of investment slowed down during the third quarter, as a result of the election effect. In total, 14 transactions were closed between July and September, amounting to €196 million, compared with €699 million during Q2 and €342 million during Q1. Activity has been driven up by the sale of portfolios of assets, which accounted for 34% of investment volumes and 54% of rooms. The most noteworthy transaction in this category was the creation of Bay, the first pure hotel Socimi, by Barceló and Hispania; there was also the partnership signed between Meliá and Starwood Capital, with the aim of repositioning the Sol brand.
The sun and beach segment accounted for 68% of investments, with the Canary Islands leading the ranking as the star destination – €369 million was invested there. The Costa del Sol and Madrid also recorded significant increases, in contrast to Barcelona, where investment decreased by 15%, due to the impact of the hotel moratorium imposed by the city’s mayoress, Ada Colau.
By category, most of the transactions so far this year have involved 3-star and 4-star hotels, which has led to a decrease in the average price per room of €22,500, despite the rise in the number of rooms sold, which has increased from 6,192 in 2014 to 15,800 this year.
In terms of the profile of investors, Socimis continue to lead the ranking. During the 9 months to September 2015, they invested €302 million, i.e. five times more than in 2014. Also noteworthy is the growing activity of international investors such as the Olayan Group (Saudi Arabia) and the Kangde Group (China), which have acquired the Hotel Ritz in Madrid and the Hotel Santiago de Tenerife, respectively.
Irea expects that 2015 will exceed the previous record registered in 2006 (€1,780 million) and that the level of investment will be maintained in 2016. Foreign Socimis and investors will continue to be the most active investors and hotel property groups are expected to start invested once again.
Original story: Expansión (by Y. Blanco)
Translation: Carmel Drake