Q1 London Hotel Investment Shows Strong Activity

A new report released by Jones Lang LaSalle Hotels has shown that hotel investment in Europe, Middle East and Africa (EMEA) equated to 1.5 billion euros in Q1 2012.

London and Paris saw the majority of investment activity and combined secured investment of 645 million euros and the report forecasts that this figure will continue to rise.

“Investment sentiment remains robust for quality assets in key cities, however, this sentiment could soften over the next months if growth in hotel performance continues to slow across some of the key European hotel markets”.

At year-to-date February 2012 hoteliers posted a fall in revenue per available room (RevPAR) in some cities, such as Munich (-7.7 %), Düsseldorf (-11.5 %), Amsterdam (-9.7 %), Zurich (-10 %) or Copenhagen (-2.6 %),” CEO Continental Europe Jones Lang LaSalle Hotels, Christoph Härle commented.
The report also stated that the UK remained the strongest market in Q1 2012, securing 784 million euros in total hotel transaction volumes (52% of the total EMEA transaction volumes). Unsurprisingly, London saw the highest level of transaction activity, with 11 completed hotel sales.

“London was once again one of the most active hotel investment markets in Europe and we anticipate further strong interest across the market, including for trophy assets. The pricing gap between regional UK and London hotels is widening and, while trading in many of the regions remains weak, we do not anticipate a significant uptick in transactional activity in those markets in the short to medium term, except where driven by distress,” Jon Hubbard, CEO Northern Europe Jones Lang LaSalle Hotels stated.

The report also forecasted that hotel investment sector will remain active however, due to the continued lack of debt and a lack of high margins for active lending banks, means some transactions are hard to complete.

“The outlook for 2012 remains much the same as 2011, with a total hotel transaction volume of around €8 billion forecast,” Hubbard added.

For more information about hotel investment, contact Experience International on 0207 321 5858 or email enquiries@experience-international.co.uk.

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