Mideast buyers drive European hotel transactions

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marriott-internationalEuropean hotel transaction volume in 2013 reached a new peak since the onset of the global financial crisis, signaling a comeback of the hotel real estate market.

In 2013 Middle Eastern buyers played a significantly larger part in the hotel transactions market. Capital from the region averaged some 12 per cent of total volume in 2012, while in 2013 it reached 30 per cent, growing in absolute terms from €646 million to €2.3 billion. One of the biggest transactions was ADIA’s (Abu Dhabi Investment Authority’s) purchase of 42 Marriott hotels in the UK for €640 million.

Total transaction volume across Europe reached €7.7 billion in 2013, a 39 per cent increase on the €5.6 billion recorded in 2012. The first quarter of 2013 accounted for more than half of the year’s total transaction volume, totaling €4.2 billion.

The UK was, again, the most liquid market in Europe, with transaction volume reaching €3 billion, accounting for 39 per cent of total sales, while The Netherlands had the greatest increase in transaction activity in Europe last year with volume totaling nearly €500 million, compared with €118 million in 2012.

Transactions of single assets from high-net-worth individuals (HNWI) showed 70 per cent growth in 2013 to €982 million, as investors, including those from the Middle East, displayed a growing interest in acquiring key assets throughout Europe.

Institutional investors, including sovereign wealth funds, accounted for approximately 42 per cent of portfolio buyers and 19 per cent of single asset purchasers. Hotel operators have shown an interest in purchasing strategic assets as part of their expansion plans, including Mandarin Oriental acquiring the Mandarin Oriental in Paris from their joint venture partner Société Fonciére Lyonnaise for €290 million, and The Dorchester Collection purchasing the Eden Hotel in Rome for €105 million from Starman.

Private equity companies such as Starwood Capital, Blackstone and AXA Real Estate Investment Managers demonstrate an on-going interest in hotels.

“We expect HNWIs and sovereign wealth funds from both Asia and the Middle East to continue to play an even more important role in the European real estate market as they seek to invest in prime assets,” said Louise Fury of property consulter HVS London.

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Reading Time: 2 minutes

European hotel transaction volume in 2013 reached a new peak since the onset of the global financial crisis, signaling a comeback of the hotel real estate market.

Reading Time: 2 minutes

marriott-internationalEuropean hotel transaction volume in 2013 reached a new peak since the onset of the global financial crisis, signaling a comeback of the hotel real estate market.

In 2013 Middle Eastern buyers played a significantly larger part in the hotel transactions market. Capital from the region averaged some 12 per cent of total volume in 2012, while in 2013 it reached 30 per cent, growing in absolute terms from €646 million to €2.3 billion. One of the biggest transactions was ADIA’s (Abu Dhabi Investment Authority’s) purchase of 42 Marriott hotels in the UK for €640 million.

Total transaction volume across Europe reached €7.7 billion in 2013, a 39 per cent increase on the €5.6 billion recorded in 2012. The first quarter of 2013 accounted for more than half of the year’s total transaction volume, totaling €4.2 billion.

The UK was, again, the most liquid market in Europe, with transaction volume reaching €3 billion, accounting for 39 per cent of total sales, while The Netherlands had the greatest increase in transaction activity in Europe last year with volume totaling nearly €500 million, compared with €118 million in 2012.

Transactions of single assets from high-net-worth individuals (HNWI) showed 70 per cent growth in 2013 to €982 million, as investors, including those from the Middle East, displayed a growing interest in acquiring key assets throughout Europe.

Institutional investors, including sovereign wealth funds, accounted for approximately 42 per cent of portfolio buyers and 19 per cent of single asset purchasers. Hotel operators have shown an interest in purchasing strategic assets as part of their expansion plans, including Mandarin Oriental acquiring the Mandarin Oriental in Paris from their joint venture partner Société Fonciére Lyonnaise for €290 million, and The Dorchester Collection purchasing the Eden Hotel in Rome for €105 million from Starman.

Private equity companies such as Starwood Capital, Blackstone and AXA Real Estate Investment Managers demonstrate an on-going interest in hotels.

“We expect HNWIs and sovereign wealth funds from both Asia and the Middle East to continue to play an even more important role in the European real estate market as they seek to invest in prime assets,” said Louise Fury of property consulter HVS London.

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