Hotel investment in Europe, Middle East and Africa falls

21 January 2010 by
Hotel investment in Europe, Middle East and Africa falls

The hotel investment volume in Europe, Middle East and Africa (EMEA) fell to €2.9b (£2.5b) in 2009, reflecting the lowest volume of transactions since the late 1990s and a drop of 63% compared with 2008, according to global hotel investments services firm Jones Lang LaSalle Hotels.

While 2010 is expected to remain challenging, by the end of the year improving economic conditions, strengthening of investor confidence and an increase in stock on the market could increase investment volumes by almost 40%, compared with 2009, and reach £3.5b.

"The EMEA hotel market will continue to be difficult in 2010, albeit with some important signs of improvement," said Mark Wynne-Smith, chief executive officer, Jones Lang LaSalle Hotels, EMEA. "Transaction activity will be characterised by two types of investors, opportunistic buyers and secure income buyers.

"The former will be most apparent in the markets most severely impacted during 2009, including the UK, Spain and Ireland. The latter group will mainly constitute institutional investors, searching for properties with a solid income and sound covenants."

The majority of hotel investment activity during 2009 was recorded on continental Europe, with France taking the lead. The strongest demand was apparent for key gateway cities such as London and Paris.

The UK, normally the leading market in terms of volume, was ranked in second place as investment activity in the regions came to a virtual standstill and was followed closely by Germany and Spain. However, during 2010 the UK is expected to once again become the leading country in terms of volume, moving back towards a 30-40% share of investment into EMEA.

As lending capacity reached record lows in 2009, single asset transactions became the prominent type of deal in the hotel market accounting for 72% of total volumes, and portfolio activity falling by almost 80% compared with 2008.

The number of distressed hotel assets on the market is expected to slightly increase in 2010. Although many owners have faced refinancing challenges in 2009, distressed hotel sales have not been widespread.

Enterprise Inns sees fall in net income >>

Travelodge to open 26 new hotels in 2010 >>

Timeshare - grin and share it >>

By Janet Harmer

E-mail your comments to Janet Harmer here.

If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to jobs
Looking for a new job? Find your next hotel job here with jobs

[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
TagsFinance and Hotels
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking