EMEA hotel investment rebounds

Hotel investment volumes in the EMEA region reached EUR 3.4 bn during the first six months of 2011, a 73% increase on the same period last year (EUR 1.94 bn), according to Jones Lang LaSalle Hotels.

The H1 2011 figure marks a 123% increase compared to volumes recorded for the same period in 2009. JLL Hotels now estimates year end volumes will reach EUR 9.5 bn - a 14.5% increase on the forecast prepared in January of this year.

France emerged as the most liquid market during H1 2011 with EUR 594 mln transacted, including the significant sale of the Marriott Champs Elyees and a portfolio of Campanile Hotels. The UK moved into second place after dominating 2010 with EUR 442 mln, followed by Russia (EUR 400 mln), Germany (EUR 380 mln) and Spain (EUR 172 mln).

Mark Wynne Smith, CEO of EMEA at JLL Hotels: 'The majority of investment this year has originated within Europe as investors continue to feel more assured about cross border deals. In 2010 unencumbered properties and lease contracts were the most popular transaction conditions. However, as a result of a notable growth in investor confidence and an increase in deal flow, buyers are now more positive about fair priced management contract hotels, which have accounted for most deals so far this year - including the notable sale of six Intercontinental assets across Europe and the Ritz Carlton in Moscow.'

Wynne Smith added: 'Debt levels remain limited in EMEA but more parties are willing to enter the lending space for hotels, actively looking for the best deals, as well as the hope of a revival of Europe’s commercial mortgage-backed security market. As banks speed up their workout programmes significant product is expected to come to the market during the remainder of the year, including some notable portfolios, and we are confident of an even stronger second half of 2011.'