European Hotel Transactions Reach Six-Year High
The total European hotel transaction volume in 2013 reached the market's highest point since 2007.
Transactions volumes reached €7.7 billion in 2013, increasing 39 percent from the €5.6 billion in 2012, according to real estate consulting firm HVS London. Volumes recorded in the first quarter alone totaled €4.2 billion, accounting for more than half of the year's total.
Financing for prime assets has become more readily available, from both domestic as well as overseas banks, altering the hotel investment landscape, according to the report's co-author Veronica Waldhausen, HVS London associate.
The U.K. was the most liquid market in Europe, with transaction volumes reaching €3 billion, representing 39 percent of total sales. The Netherlands recorded Europe's largest increase in activity with volumes totaling almost €500 million, compared to €118 million in 2012.
Hotel transactions were dominated by portfolio deals in 2013, totaling €3.3 billion, increasing 48 percent from the previous year. The most notable deals included the Constellation Hotels' purchase of the Groupe du Louvre portfolio from Starwood Capital for €700 million, Abu Dhabi Investment Authority's purchase of 42 Marriott hotels in the UK for €640 million, and the purchase of the Malmaison and Hotel du Vin portfolio by private equity firm KSL for €234 million.
The Middle Eastern buyer group increased significantly in 2013, with capital flowing from the region averaging 30 percent of the total volume in 2013, increasing from 12 percent the previous year. It grew from €646 million to €2.3 billion.
Single-asset transactions from high-net-worth individuals increased 70 percent in 2013 to €982 million, the report shows.
"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 the report's co-author Louise Fury. "Additionally, North American investors - primarily private equity companies, real estate investors and institutional investors - will eye Europe as an attractive region with continuous growth potential and comparatively better value for money."