EMEA hotel investment is driven by Middle Eastern capital.

 

The first half of 2013 saw a 38 percent rise in hotel investment volumes in Europe, the Middle East, and Africa compared to the same period last year, owing primarily to a significant increase in Middle Eastern capital. real estate in qatar

According to the most recent data from Jones Lang LaSalle, overall hotel investment volume in EMEA was €5.5 billion in the first half of the year, with the majority of it occurring in the first quarter.

The amount of money invested in the area by Middle Eastern investors nearly tripled from €745 million in the first half of 2012 to €2.1 billion in the first half of 2013. According to JLL, investment volumes continued to be dominated by wealth funds from Qatar and Abu Dhabi, with an emphasis on core European markets.

The most active market was the United Kingdom, which reported €2.3 billion in transaction volumes, accounting for 41% of total EMEA volumes. France came in second with €1.3 billion, accounting for 23% of the total, and Germany came in third with €642 million, accounting for 12% of the total.

"This is being fuelled by a large pipeline of opportunities coming to market and a closing of the gap between buyer and seller pricing expectations, not least driven by more readily available debt funding, both from conventional and new sources of debt," Christoph Härle, chief executive, continental Europe, for JLL's Hotels & Hospitality Group, said in a statement.

The sale of the 447-room InterContinental London Park Lane, which was acquired for €359 million by an affiliate of Constellation Hotels Holding Limited, a Middle Eastern private investment group; and the sale of the 138-room Mandarin Oriental Paris, which sold for €290 million to the Mandarin Oriental Hotel Group, including two retail units, were among the "trophy deals" completed in the first half of the year.

A total of €1.8 billion was spent on portfolio transactions involving 42 UK Marriott hotels, four Groupe du Louvre hotels in France, and the Principal Hayley portfolio of 27 UK hotels, accounting for 33% of the total transaction volume in EMEA.

Westmont, Starwood Finance, and Morgan Stanley were among the global investors who contributed 20% of the invested capital.

The firm's initial estimate of €8.5 billion for investment volumes for 2013 is anticipated to be exceeded.

 

The German Residential IPO has been canceled.

Deutsche Annington, Germany's largest residential landlord, has had its initial public offering delayed due to "persistent adverse market conditions," according to backers.

Terra Firma Capital Partners, the private equity firm run by British financier Guy Hands, owns Deutsche Annington. The German firm has a total of 180,000 residential units under its management.

According to the Financial Times, Hands hoped to collect around €1.1 billion from the IPO, valuing the firm at about €11 billion, including debt.

In a statement, Deutsche Annington CEO Rolf Buch said, "Based on our strong financial position, we will concentrate on driving our operational efficiency, including continuing our investment and modernization program as expected."

Bloomberg notes that investor demand for Deutsche Annington shares "falls short."

German stocks had been rising until recently, but have recently cooled due to concerns about rising interest rates.

According to Torsten Klingner, an analyst at Warburg Research in Hamburg, Deutsche Annington "had the bad luck of setting its price range just before the global volatility with interest rates began."

Analysts also believe that investors are losing interest in German residential real estate, which has benefited from low vacancy rates and consistent rental returns.

LEG Immobilien AG, formerly owned by Goldman Sachs Group Inc., went public in February and earned €1.3 billion in stock sales, according to Bloomberg, the largest in Germany's real estate industry. After February, the stock has lost more than 7% of its value.

Bloomberg notes that two more real estate firms are considering going public. Cerberus Capital Management LP intends to sell shares in German retail assets, and Immofinanz AG of Austria is planning a public offering for its residential unit.

"I wouldn't read too much into the lack of demand for Annington for the other IPOs," said Peter Papadakos, a London-based analyst at Green Street Advisors. "It wasn't a question of structural demand or structure, but rather of price. Annington will return at a later date, and if the price is reasonable, it is likely to float."