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Spain dominates European hotel investment during H1 2017

by Andrea Waitrovich

European hotel investment transaction volume totaled €9 billion ($11 billion) during the first half of 2017, representing an increase of 6 percent year-on-year, according to CBRE.

Spain hotel investment transaction levels soared by 228 percent year-on-year and reached more than €2 billion ($2.4 billion) for the first half of 2017. The strong market performance has been largely driven by Spain’s economic recovery, attractive asset pricing and availability, which helped make Spain the most liquid hotel market during the second quarter 2017.

The largest portfolio transaction in the history of the Spanish hotel market occurred this year. Starwood Global Opportunity Fund X, managed by Starwood Capital Group, sold its interest in a collection of hotels across key leisure markets in Spain.  The assets are owned in a joint venture with Melia Hotels International, which retained its interest in the assets. The portfolio consists of four well-established beachfront hotels representing 2,070 keys that will continue to be managed by Melia.

Other strong markets were Italy and the Nordics with Italy posting a 59 percent increase with deals totaling more than €700 million ($823 million) and the Nordics reached an 57 percent increase during the first half of 2017.

Recently, Colliers reported the transaction volume in Italy in 2017 should reach the highest level of the past 10 years. The investment volume in Italy totaled €5 billion ($5.9 billion) during the first half of the year, up by 43 percent compared with the same period of 2016, which totaled €3.5 billion ($4.1 billion).

And the investment volume in the Nordics totaled nearly €19 billion ($22 billion) during the first half 2017, in line with the very high volumes recorded over the past three years, according to Savills. In Norway the half-year turnover nearly doubled and Denmark reached a peak. Sweden failed to reach the high that was set during first half of 2016 but remained 19 percent above the long-term average. The lack of suitable prime opportunities in Finland restrained the activity of the market, while cross-border interest strengthened.

CBRE reported the United Kingdom and Germany had a decline in hotel investment volumes of –9 percent and –10 percent, respectively.

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