Hotel transactions in EMEA increased by 17% in 2013.

 

In 2013, hotel transaction volumes in Europe, the Middle East, and Africa rose by 17% to $13.2 billion, with the core markets of the United Kingdom, France, and Germany leading the way. doha property finder

Hotel transactions are projected to increase by more than 20% to $16 billion in 2014, according to JLL's Hotel Investment Outlook survey.

"While some markets are at various stages of recovery, underlying sentiment is much more optimistic, leading to increased interest in hotel investment," said Jon Hubbard, CEO of Jones Lang LaSalle's Hotel & Hospitality Group in Northern Europe.

The firm claims that continued sell-down of over-leveraged assets under lender control, as well as many private equity funds nearing the end of their life-cycle, have aided transactions.

In Europe, debt conditions have changed, with more banks lending to the hotel industry.

Mr. Hubbard said, "We expect to see increased appetite from institutional investors." "They are looking to the hotel sector as part of a well-diversified real estate portfolio, not just for direct investment but also to place significant sums of money into the debt market as they aim to increase their exposure to higher yielding real estate."

In 2014, investors should look to the core markets of the United Kingdom, France, and Germany for good opportunities.

Aside from existing European lenders like Aareal, a rising number of domestic and international banks, including the Bank of China, United Overseas Bank, RBS, and a number of Middle Eastern banks, are lending to the market, according to JLL.

According to the study, cross-border investment is on the rise, especially from US-based private equity funds looking to invest in core European markets and institutional or opportunistic assets.

In the paper, Christoph Härle, CEO Continental Europe at JJL's Hotel & Hospitality Group, said, "Investors from Asia are keen to tap into this area as well, as the European real estate market offers some very attractive returns and medium term growth prospects compared to their domestic markets." "More Chinese investors have arrived on European soil in the last 12 months, and we expect this trend to continue as the number of outbound travelers from China grows."

The United Kingdom received the most investment, totaling $4.7 billion, or 37% of the overall amount in 2013. Three wide portfolio transactions drove the growth in the first quarter. This trend is expected to continue in 2014, with revenue per average room expected to rise by 4% in London.

With 18 percent of the market, or $2.3 billion, France came in second, owing to a slew of trophy asset sales and prominent portfolio transactions, including Groupe du Louvre and Mandarin Oriental Paris. Given the scale of the transactions in 2013, 2014 is expected to be a quiet year for the French hotel industry.

Germany's hotel industry is projected to remain one of the most sought-after in Europe.

Mr. Härle said, "Distressed areas such as Spain, Italy, and Ireland will also offer good buys, and investors will be eager to move on well-positioned assets in these markets." "After years of low activity, the CEE saw a decent number of assets trade in 2013, and we expect this trend to continue in the core markets."