Hotel investment booms in Europe
Investment in European hotels has boomed in the first half of the year with investment volume of e6.4bn across the continent.
Mark Wynne-Smith, European CEO, Jones Lang LaSalle Hotels said: “Over the past two years, investors have shown an increased interest in hotel assets. Much of this interest has been driven by yield compression in the mainstream commercial property market.”
The UK is again the most liquid European hotel market, representing 58% of year-to-date single asset transaction volumes and 75% of the portfolio transactions.
The recent investment activity in Spain is expected to continue, fuelled by hotel operators offloading assets from their balance sheets. France is expected to continue a similar level of activity with strong interest in Paris fuelled by the sale of trophy assets like the Paris InterContinental.
Italy, which is still perceived to be opaque by most investors, will continue to attract interest from an ever-expanding pool – not only due to the increased availability of debt and equity, but also the attractiveness of the returns offered by hotels compared to offices.
The Benelux countries are likely to enjoy good investor interest while central and eastern Europe is expected to see continued investor interest by opportunistic buyers particularly in Budapest.