Investment in EMEA hotels fell by over 50% in 2009, according to new research from Cushman & Wakefield Hospitality. Total investment volumes totalled EUR 3.2 bn in 2009 against EUR 6.4 bn in 2008, with 50% by value in 2009 being distressed sales. The 2009 total marked an 85% fall on 2007’s record figure of EUR 19.8 bn.
Investment in EMEA hotels fell by over 50% in 2009, according to new research from Cushman & Wakefield Hospitality. Total investment volumes totalled EUR 3.2 bn in 2009 against EUR 6.4 bn in 2008, with 50% by value in 2009 being distressed sales. The 2009 total marked an 85% fall on 2007’s record figure of EUR 19.8 bn.
Although the UK market has suffered the sharpest decline over the last three years, it remained the most active EMEA market with 29% of total volumes or EUR 935 mln invested despite a fall of 50% in 2009 alone. France and Germany were the next most active markets with 16% and 9% of total volumes invested respectively (EUR 520 mln and EUR 300 mln).
The largest European deal in 2009 was the purchase of the 560-room Radisson Blu Hotel in Hamburg by Invesco Real Estate from the Azure Group for EUR 155 mln. This was closely followed by the purchase of the Aviemore Highland Resort in Scotland by MacDonald Hotels from administrators PricewaterhouseCoopers for EUR 153 mln. The year ended on a high with the purchase by a subsidiary of BBVA of a hotel development on The Strand in London for about EUR 125 mln, Cushman & Wakefield said.
The property advisor said 2009 has been characterised by decline in foreign buyers to the benefit of domestic investors. US investment has fallen 68% or EUR 790 mln to stand at EUR 252 mln (a 93% fall since 2007). Middle Eastern investors have dropped slightly to 14% of 2009's total but are expected to grow further from 2010 along with Asian buyers fuelled by faster economic recovery.
Distressed sales accounted for 50% of the volume transacted with the number sold under administration increasing significantly at year end. C&W Hospitality expects to see a further increase in distressed sales in 2010 with large portfolios acquired in 2005 coming to market as senior debts mature.
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