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Spanish hotel investment market records highest year-on-year growth in Q3 2016

London - Moscow, 16 November 2016 – European hotel investment volumes totalled €3.8 billion in the third quarter (Q3) of 2016, taking the total turnover since the start of the year to €10.3 billion. 

Q3 2016 was overall more positive compared to the first half of 2016 with the decline in deal volumes only down by 6% compared to a strong Q3 2015, according to the latest figures from global commercial property advisor CBRE.

Q3 2016 saw Spanish hotel investment record the highest year-on-year growth of 162%, with transaction volumes reaching €537 million. This was largely driven by strong investor demand to buy and capitalise on the improving economic and performance recovery which has continued to gather pace. Transactions this quarter spanned the country, including gateway and secondary cities and resort locations. A notable transaction was the five-star Pullman Barcelona Skipper, 241-keys and sold off a guide price of €90million. Italy and Ireland have also seen a year-on-year increase of 135% and 106% respectively in Q3 2016.

The German hotel investment market has remained the most attractive to investors with transaction volumes reaching €856 million in Q3 2016. Germany continues to offer consistently high levels of liquidity and strong market fundamentals.

Joe Stather, Information and Intelligence Manager EMEA, CBRE Hotels, said: “European hotel transaction volumes continue to reflect the challenging current climate and the decline is in line with the slowdown across all mainstream European commercial property. However, the rate of negative growth in hotels is slowing and a strengthening deal pipeline in the UK, Spain and Italy suggests more buoyant deal volumes for the beginning of 2017.”

Jorge Ruiz Andres, CBRE Hotels, Spain, said: “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.” 

Olesya Dzuba, Head of Research, Russia, CBRE: “The volume of hotel investment in Russia increased to USD627 mn in Q1-Q3 2016 from 34 mn in Q1-Q3 2015, mainly because of the sale of large Gorki Gorod ski resort in Krasnaya Polyana in H1 2016. We observe high investor interest for the hotel sector during last two years. The reasoning, firstly, is in their relatively stable nature for capital preservation and gains, secondly, in its potential for value recovery after ruble devaluation, especially taking into account that all hotel income is in rubles. Moreover, the expectation of hotel values growth is supported by ADR and occupancy positive dynamics in 2016”.