2015 is on track to be a record year for foreign investment in hotels, with global transactions reaching $42 billion in the first half of the year, according to JLL.
The largest total deal volumes in the first half of the year were witnessed in the Americas at US$24 billion, up 73% year-on-year (y-o-y). This is followed by EMEA, up 55% to US$15 billion, whilst the Asia Pacific region saw a slight decline in investment volumes, down 6% to US$4 billion.
Whilst American private equity funds remain the largest source of capital flowing into hotels, H1 2015 saw a significant rise in transactions involving Mainland Chinese and Middle Eastern investors, who allocated US$9.8bn to global hotels real estate, up from US$2.3bn during the same period last year.
“One of the biggest trends of 2015 is the surge in Middle Eastern and Mainland Chinese investment into hotels globally. This is despite some underlying concerns across the globe, such as the Greek debt crisis and the recent fluctuations in the Chinese stock market, said Mark Wynne Smith, Global CEO JLL Hotels & Hospitality.
“At the start of the year we predicted full year global hotel transaction volumes of US$68 billion. We’ve achieved 60% of this already in the first half of 2015 and, if momentum continues in the second half of the year, we could surpass our forecast.”
In terms of cross border hotel transactions, EMEA received the largest amount at US$9billion in H1.
“Portfolio sales are increasingly popular in EMEA and accounted for 65% of the total transaction volumes,” commented Wynne Smith. “This tells us that investors are looking for scale in what’s becoming a very competitive market.”
The largest portfolio deal in Q2 2015 was the sale of the Maybourne portfolio in London to a Middle Eastern investor for US$2 billion.
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