The EMEA hotel investment market has demonstrated strong growth in the first three quarters of 2010, reaching EUR 3.97 bn, according to Jones Lang LaSalle Hotels.
The EMEA hotel investment market has demonstrated strong growth in the first three quarters of 2010, reaching EUR 3.97 bn, according to Jones Lang LaSalle Hotels.
Investment volumes across EMEA now represent a 55% year-on-year increase against the EUR 2.5 bn transacted between Q1 and Q3 in 2009. As forecasted by Jones Lang LaSalle Hotels growth accelerated further during Q3 2010 with EUR 1.8 bn transacted across EMEA, a significant 70% increase on Q3 2009 levels (just over EUR 1 bn).
Mark Wynne Smith, CEO for Europe, Middle East and Africa at Jones Lang LaSalle Hotels commented: 'Sellers are now more realistic about their pricing expectations and this has helped kick start the market following a very quiet period. We currently have a reasonable balance between the number of buyers and the stock of hotels on the market. We have also seen a number of distressed sales complete which has given us a good sense of how buyers price when they have a highly motivated seller. Acquisition debt is however is still scarce'.
The UK has been the most active market so far this year, with over EUR 1 bn of investment transacted, followed by France with approximately EUR 505 mln invested. Spain comes third with EUR 291 mln transacted.
Although confidence and activity in the hotel investment market has started to return, some levels of uncertainty remain with investors continuing to concentrate their activities on domestic deals subject to lease agreements. Nevertheless, an increasing number of hotels with a management contract have transacted during the year, currently representing a share of almost 28%, compared to only 5% in the full year 2009.
JLL Hotels also saw US investors return to the EMEA hotel investment market - they currently represent a 20% share of volumes, compared to 6% for the full year 2009. Domestic investment remained dominant, although its share fell from nearly 59% in the full year 2009 to 36% in the first three quarters of 2010.
Wynne Smith continued 'Jones Lang LaSalle Hotels predicted a marked rise in EMEA investment levels in the second half of the year and this is now clearly in progression. As a result, we have adjusted our 2010 transaction volume projection by EUR 1 bn to EUR 5.5 bn which would represent an increase of more than 76% compared to 2009 (EUR 3.12 bn).