Investment activity in the European hotel market is starting to pick up, and growth is expected to accelerate further in the second half of 2010, according a new research report issued by Jones Lang LaSalle Hotels.
Investment activity in the European hotel market is starting to pick up, and growth is expected to accelerate further in the second half of 2010, according a new research report issued by Jones Lang LaSalle Hotels.
Transaction volume rose marginally to EUR 1.6 bn at the end of H1 2010, representing a 6% year-on-year increase. According to JLL Hotels, there is a strong sense that the latter part of 2010 will witness stronger investment activity, with expectations that the second half of 2010 could see transaction volumes double on H1 levels.
The UK has been the most active market in 2010, with over EUR 300 mln of investment transacted which represents a 19% market share compared to 14% in 2009. Last year's leader, France, is not far behind with EUR 270 mln invested.
Hotel operators, institutional investors and investment funds/private equity continue to display a strong appetite for investment, and together accounted for nearly 65% of all hotel investment in the Europe, Middle East and Africa (EMEA) region in H1 2010. This indicates that sophisticated investors believe it is a good time to buy and are enjoying reduced competition for assets, as many of the high-leverage buyers have fallen out of the market.
'We are starting to see sellers acknowledge that buyers' pricing is acceptable given the current economic climate, which is likely to drive increased deal volume as the year progresses,' said Mark Wynne Smith, CEO for EMEA at JLL Hotels. Smith also noted the stock being marketed is of a substantial volume and that there are more deals in the pipeline than there were in H1 2009, many of which will materialise over the coming months.
