The year will be a record one for hotel property deals, delegates at the 7th International Hotel Investment Forum (IHIF) in Berlin were told today.
CB Richard Ellis senior director Chris Rouse told the conference that, with public markets showing signs of recovery, there has been a renewed interest in realising the value locked up in real estate assets.
Rouse said: “From recent evidence it is clear that InterContinental, Hilton and Whitbread will all be realising asset values in 2004 as a result of strategic reviews.”
Millennium & Copthorne is similarly expected to review its portfolio.
As well as the sale of individual or portfolio hotel assets, Rouse said corporate disposals were also likely in 2004.
“In the planned category is Rezidor SAS, where the turmoil within the controlling airline parent looks likely to lead to the disposal of the last major hotel company owned by an airline,” Rouse said.
Mark Finnie, managing director of European Equity Research at Deutsche Bank, said private equity players and institutions would dominate acquisitions.
He added: “Traditional hotel companies are not in the game when it comes to buying assets.
“When you look at the likely spin off of real estate, I would be surprised if the size of the sector looked bigger in three years’ time.”
The expected introduction of REITs in 2006 or 2007 following tomorrow’s Budget would add a further dimension to the hotel sector.
Rouse said: “REITs have transformed hotel investment in the US over recent years and their introduction into the UK, Europe’s dominant hotel investment market, has the potential to produce a similar revolution.
“As capital inflows into the German funds appear to be declining sharply in the first months of this year, the field looks open for UK-based REIT vehicles to assume a dominant role.”
References: EGi News 16/03/04
