The number of European hotel transactions has risen by nine per cent since 2010 and the UK remains the most active investment market of them all, with total transaction volume of €2.7 billion.
However, according to the annual European Hotel Transactions report published this week by HVS London, the total volume still remains well below the 2006 peak of €20 billion and the 10-year average of €9.9 billion.
“In 2011, there was a growth in both trading performance and hotel values across Europe indicating that recovery is under way,” said Charles Human, managing director of HVS Hodges Ward Elliott, the hotel brokerage and investment banking division of HVS.
“Despite this, bank debt remains scarce making it hard for investors to secure financing outside major gateway cities.”
The top buyers and sellers
The European Transactions report charts each year’s single asset and portfolio hotel transactions, identifying the top buyers and sellers, the sale price and price per room, as well as the geographic regions proving popular with investors.
Last year’s activity involved 116 transactions of more than €7.5 million per property, with 264 hotels and more than 43,200 rooms sold. In addition, a number of distressed assets came to the market in 2011 including the von Essen portfolio of 28 hotels (26 across the UK).
In terms of single asset transactions, the hotel investment market was dominated by institutional investors, hotel operators and real estate investors, accounting for 78 per cent of total volume. In 2011, private equity companies more than doubled their investment in single assets
“In 2012 we are likely to see a marginal increase in the number of distressed sales but, with debt so hard to find, it will be some time before we see transaction volumes return to pre-credit crunch levels,” added Charles Human.