UK top European target for hotel investment

The UK is the top European target for hotel investment in 2017, according to a new survey by CBRE.

CBRE’s European Hotels Investor Intentions survey found that respondents view the UK as the most attractive market in Europe for hotel investment, reflecting a growing confidence in the UK real estate market following a post-referendum slowdown in investment activity in 2016.

Germany is rated by investors as the second most attractive investment market for hotels, followed by Spain, France, and Italy and the Netherlands.

“2017 will see some complex opening manoeuvres in the Brexit negotiation, not least because of the potential for some twists and turns in European politics too. Brexit will take time but the wheels of the economy will still turn and there is no doubt that the UK’s particularly strong economic fundamentals will further underpin investor confidence in purchasing UK property,” comments Miles Gibson, Head of UK Research at CBRE.

The survey findings further revealed that hotel investors cited “economic growth” as the greatest opportunity to European hotel investment in 2017. This was closely followed by “the cost and availability of debt”. However, the primary concern for hotel investors in 2017 is “asset pricing and geopolitical influences”.

 

Spain top performer in Europe’s hotel market

16th November 2016

Spain has emerged as the top performer in Europe’s hotel market, recording the greater year-on-year growth in investment.

According to CBRE, European hotel investment totalled €3.8 billion in the third quarter of 2016, down 6 per cent on the same period in 2015. The firm describes it as a “testing” year, with investment down in the first nine months of 2016 compared to the same period 12 months earlier. Nonetheless, Spain has enjoyed a positive quarter, with investment surging 162 per cent year-on-year, the best in Europe.

Spain’s positive performance arrives as Barcelona prepares to host the Mediterranean Resort & Hotel Real Estate Forum at the end of November. The country’s hotel sector saw €537 million in transactions, which CBRE attributes to demand from investors to buy and capitalise on the improving economy. Indeed, the IMF forecasts economic momentum will continue in 2016, with growth of around 3.1 per cent at the end of December.

“Current GDP growth of double the Eurozone average is having an indisputably positive impact on the country’s hotel market,” says CBRE. Tourism is, as ever, blossoming, with foreign arrivals predicted to top 70 million for the first time this year. Improving employment figures at home have also helped to boost domestic leisure demand for accommodation.

Transactions spanned the country in the third quarter, including gateway and secondary cities and resort locations. While resort locations are generating the greatest yields, Spain’s primary city performance is rippling into the regions, says CBRE. One notable transaction was the five-star Pullman Barcelona Skipper, which was sold off a guide price of €90 million.

Jorge Ruiz Andres, CBRE Hotels, Spain, says: “Investor appetite for Spain is soaring on the basis of strengthening economic fundamentals, performance growth across the country and attractive asset pricing relative to other consolidated European destinations. The liquidation of non-performing loans will heighten transaction activity in the market over the coming months and we also recognise a number of value-add and core opportunities for more conservative sources of capital.”

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