Hotel investment takes the lead in real estate
The summer has been a boon for hotel investment in real estate. The recovery of tourism, which set record figures with 88 million visitors, is positively reflected in the results of this market, as confirmed by analyses.
The latest report published by CBRE indicates that this sector led real estate investment in the first nine months of the year, with a volume of 2.2 billion euros, representing 30% of the total transactions in Spain.
Although the data show a 7% decline compared to the same period last year, CBRE emphasizes that they demonstrate that investors remain active and continue to bet on the sector. This position gains more significance, considering the current economic context and the poorer performance of other asset types.
During the analyzed period, a total of 86 transactions were recorded, involving 11,169 rooms, compared to 120 hotels and 12,427 rooms the previous year. Higher-category hotels attract the most investment, with 51% of the total corresponding to four-star establishments and 32% to luxury properties.
Regarding asset types, the consultancy notes that the urban segment is the most attractive to investors, representing 53% of the invested capital, while the remaining 47% corresponds to vacation properties. Barcelona and Madrid emerge as the main locations, concentrating 23% and 22.6%, respectively. They are followed by two vacation destinations: the Balearic Islands (19%) and Malaga (13%).
In contrast, prime yields tilt the balance toward vacation properties, specifically on the islands. In the third quarter of the year, they stood at 5% in Madrid and Barcelona, while in the islands, they reached 6%. In both cases, it reflects an upward trend in line with major European capitals.
Investment from Arab countries
Sovereign funds are behind a significant portion of the large operations carried out in recent months. Singapore’s GIC has acquired 35% of HIP (Hotel Investment Partners), which has a portfolio of 59 assets valued at around 1.4 billion euros, according to reports in some media outlets such as the Financial Times.
Similarly, the Abu Dhabi Investment Authority (Adia) has completed the purchase of 17 hotels from the Equity Inmuebles fund. This transaction exceeds 600 million euros and includes hotel rooms from the Meliá, Tryp, and Sol chains, along with the ME Madrid Reina Victoria hotel.
Saudi Arabia and the United Arab Emirates play a prominent role in our country’s hotel investment. The Hotel Property Telescope report by EY estimates that half of the capital transacted in the first six months of the year came from these countries. At the same time, the domestic market ranks at the top in Europe, accounting for 30% of the total volume.
Growth forecasts for 2024
CBRE estimates the current hotel supply at 1,595 thousand rooms in 14,784 establishments. The Balearic Islands and Madrid lead the ranking of new openings, comprising 22% and 17%, respectively, of the new additions.
Furthermore, growth forecasts extend to 2024, with the future opening of 275 hotels, totaling 30,000 new rooms. Premium assets also take center stage here, as 23% of these rooms belong to 5-star and 5-star luxury hotels. Cushman & Wakefield (C&W) estimates that the combined balance for 2023 and 2024 will result in an investment of 6 billion euros, evenly distributed between the two years. This figure would be in line with 2022 levels, setting the sector apart from the downward trend in the global market.