Hotel investment to accelerate in EMEA as offshore capital comes back to the region
New JLL report shows 60 per cent rise in EMEA transactions last year to almost $20 billion despite the pandemic’s effect on major economic centres
London April 6 2022: Pent-up demand for travel and the progression of the recovery will continue to drive hotel investment across EMEA, a new report by JLL reveals today.
JLL’s ‘Global Hotel Investment Outlook’ shows that investors around the world are beginning to zero in on new assets - with resorts, limited service and luxury hotels best positioned to be the first to benefit as markets reopen.
Well-resourced private equity buyers are among those at the front of the queue as the lodging sector emerges from repeated lockdowns that held back a full recovery in centres such as the UK, Germany, Italy and Spain in 2021.
EMEA accounted for nearly a third of global hotel transaction volumes in 2021 – reaching almost $20 billion in hotel sales, up 60 per cent on 2020. Nine luxury urban hotels were acquired at rates topping $1 million per key.
The report also highlights that as ESG evolves beyond corporate statements, sustainability will be a key focus. Failure to commit to both short and long-term sustainability goals has the potential to decrease asset value, increase operational costs, and discourage consumer demand.
William Duffey, Head of EMEA Hotels & Hospitality Capital Markets, JLL, said: “Despite continued geopolitical and economic uncertainty, the sector made tremendous progress last year and transaction activity is expected to accelerate even further this year. An increasing number of investors are eagerly seeking assets and the industry will benefit from the plentiful capital on hand to be deployed. Notably, we expect to see a rise in both Middle East and Far East Capital looking to deploy capital in the sector, and there is evidence of some earlier movers.
The Spanish hotel market has reported a solid pick up in investment activity, as one of the only regions that recorded an increase in volumes compared to 2019 (c. 16%). The strong momentum is expected to continue and to be largely driven by portfolio sales, particularly in the resort segment, as a response to investors’ asks for size and leisure demand. Markets that were traditionally perceived as secondary (Malaga, Seville and Valencia) are increasingly attracting investor and international operator interest, on the back of strong trading and governmental initiatives in improved infrastructure. Institutional investors are expected to continue focusing on Madrid and Barcelona – the former reporting the strongest RevPAR recovery in 2021 of all Western European capital cities.
Globally hotel sales increased by 131 per cent year-on-year in 2021 to a total of $66.8 billion. Within the total, activity in urban locations was down 22 per cent on 2019 levels. But assets situated in resort locations achieved $9.2 billion in sales globally, up 17 per cent on 2019 levels.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 98,000 as of December 31, 2021. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.