JLL: Global hotel investment levels up 60% year-on-year in Q3 2010
Tuesday 2 November 2010
The global hotel investment market experienced a strong first three quarters with transaction volumes reaching US $12.0 billion (approx. 8.6 bln.), a significant 60% increase over the same period in 2009, according to Jones Lang La Salle Hotels.
Europe, Middle East and North Africa (EMEA) was the most active region for the first three quarters of the year, recording US $5.2 billion of hotel sales (+46% year over year). However, the pace of recovery was strongest in the Americas, where volumes increased 179% over the same period in 2009 to total US $4.8 billion. Investment volumes in Asia Pacific, the region least impacted by the global economic downturn, remained strong at US $1.9 billion.
Arthur de Haast, Jones Lang LaSalle Hotel’s Global CEO, said: “The positive investor sentiment for hotel real estate assets witnessed at the start of the year has continued and even accelerated, resulting in a more active hotel investment market. We also see a strong increase in portfolio deals, showing a volume of about US $3 billion for the year in September, double the volume recorded a year before."
International capital is starting to feature strongly in EMEA. Within the period domestic capital accounted for just more than 35% of all transactions undertaken in the region. Inter-regional investors from Europe accounted for another 13%, while the remainder were attributed to international investors from North America, Middle East and North Africa (MENA), as well as from globally sourced funds.
Continuing the trend from the beginning of the year, REITs remained the most prolific buyers in the Americas, accounting for more than 50% of all transactions undertaken for the period. Acquisition activity however is also picking up from investment/private equity funds which transacted more than US $1 billion worth of hotel sales in the first nine months of the year. Asia-based capital continues to dominate activity in Asia Pacific, accounting for more than two-thirds of all transactions undertaken in the period. By country, Australia continues to be the most active market within Asia Pacific, recording more than US $700 million worth of hotel sales in the first nine months of the year.
De Haast concluded: “We are now expecting 2010 full-year, global transaction volumes to increase approximately 80-85% over 2009 figures to finish the year at US $17 to 18 billion, which is substantially higher than our previous forecast of US $12 to14 billion.”