By 2018, the “strong inertia” of ongoing operations is expected to continue
The last year has broken all the records of investment in the Spanish hotel market to reach 3,907 million euros between transactions of existing hotels, real estate for conversion to hotel and land for hotel development, representing an increase of almost 80% compared to 2016, as confirmed by Miguel Vázquez, managing partner of the Hotels Division of Irea. This figure has been the result of the transaction of 182 establishments totaling 28,813 rooms, with an average price per room of 119,000 euros, compared to 92,000 in 2016 and 85,000 in 2015, representing an increase of 40% in only two years.
The figures up to September account for 17% of hotel investment in Europe, but it is expected that after an “exceptional last quarter”, as defined by Vázquez, who has settled with 1,462 million euros in operations, at the end of the year that percentage rises to 20-25% of the global investment, which would allow Spain to be placed as second market, only behind the United Kingdom, “quite likely”, as qualified.
After this investment boom with the rise of 80% is, as explained by the director of Irea, “not only the largest number of operations, but also the price of assets has been higher when going to market after re-positioning made in the previous years. They also change the type of investor and its demands for profitability, around 5-6% in urban and 6% -7% in vacations, because we no longer have so much opportunistic fund that enters the market when things do not they are clear; although some continue to attack because in the re-positioning of vacations there is still much to do ”
And is that after “the stratospheric data of 2017”, in the words of Vázquez, “the inertia for 2018 is very positive, the year starts very well”, although he believes hotel investment will moderate and “the effect of uncertainty in Catalonia will make it very difficult to reprint similar data. ”
However, it has cited three operations that will be resolved in the first months of this year: the closing of the purchase of the Alua portfolio by Hispania in the first quarter, as announced by HOSTELTUR tourism news in ‘Hispania purchases the seven hotels of Alua for 165 million euros’; In addition, part of the Ayre portfolio is for sale, and there is a Socimi hotel project of a financial entity with 15 stores, which could be released shortly.
And it has estimated in 4,000 million euros the investments already committed for these first months identified by Irea, most of it in new construction, taking advantage of the increase registered in the purchase of land to build hotels, with operations in Bilbao, San Sebastián, southern Tenerife , Barcelona and Seville.
Among the strengths of the market, in addition to the repositioning of hotels that is allowing to improve the competitiveness and attractiveness of the destination, has highlighted “the effect called qualified Blackstone investors, which reinforce Spain as a hotel investment destination.”
Added to this is the high probability that “the debt portfolios (those transacted in the last year amount to 769 million euros, the second best figure after 2014) will end up becoming hotel transactions”.
Vázquez has called attention to the heating of prices that is occurring in destinations such as the Canary Islands, where the average price per room has risen to 152,000 euros, compared to 119,000 for the national average, although it must be taken into account that “the The operation that weighs the most in these figures has been the sale of HI Partners to Blackstone (‘Sabadell closes the sale of HI Partners to Blackstone for 630.7 million euros’), of higher quality and repositioned hotels, which has raised the prices”.
In fact the most expensive prices are found in Barcelona and Madrid, which holds the record for the most expensive valuation per room with the Operation Canalejas, with approximately 1.4 million euros, thus exceeding 1.2 million from the sale of the Hotel Magna Villa
In the Balearic Islands, as the manager acknowledges, “there is still more room because there is still a lot of hotel to reposition and, although there is price inflation, it is not as marked as in the Canary Islands, which has the advantage of having demand all year and a historic brutal five years with high occupation, which triggers the prices “.