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Transactions in the European hotel sector have seen an increase in volume reaching €12bn (£8.9bn), 58% up on the in the year to date.
The figures were revealed by Charles Human, managing director of HVS at the Hotel Investment Conference Europe at London’s Jumeirah Carlton Tower.
Introducing a session on private equity, Human painted a positive outlook of today’s hotel investment sector, highlighting there had been a 58% year-on-year volume increase.
The UK, he said, had seen the biggest number of deals, with €6.8bn-worth, representing 55% of total European volume. Some €5.2bn had been portfolio deals, with well over €1bn still pending.
Spain was the second-best performing country, with hotel investment growing 93% year-on-year, totalling €1.1bn, around 9% of total European volume.
The market is stronger than it was a year ago with the upturn driven largely by continued recovery combined with increased liquidity, said Human. ”
We are now seeing much more interest from investors in the hotel sector and we expect this to continue. “Since the start of 2014, around 20% of total group-owned or managed UK hotel stock has changed hands. That could rise to nearly 30% by the end of the year,” he said.
The all-Europe average hotel cap rate stood at 6.1% last year and has decreased to 5.9% this year, indicating continued yield compression, while PE funds accounted for 25% of all European purchases in 2014. The ratio is up to 35% this year the most active investor category and predominantly driven out of the US.
Asian buyers have accounted for around 15% of all acquisitions since the start of 2014.
