Total European hotel transaction volume rose to €7.1bn in 2011 – an increase of 9% on 2010.
According to HVS London’s annual European Hotel Transactions report, total volume remains were well below the 2006 peak of €20bn and the 10-year average since 2002 of €9.9bn.
The report found that the increase in investment activity last year could be attributed to improved leisure and business demand, triggering a rise in trading performance across Europe. In addition, a number of distressed assets came to the market in 2011 including the von Essen portfolio of 28 hotels.
Single asset activity accounted for 54% of the total transaction volume. Despite this increase of 15% on 2010 levels, the average price per room declined by 27% to €190,000.
The UK remains the most active hotel investment market with a total transaction volume of around €2.7 bn. Other key markets were France, Germany and Spain.
The hotel investment market was dominated by institutional investors, hotel operators and real estate investors, accounting for 78% of total volume. In 2011, private equity companies more than doubled their investment in single assets, albeit from a low base.
Charles Human, managing director of HVS said: “In 2012 we are likely to see a marginal increase in the number of distressed sales but, with debt so hard to find, it will be some time before we see transaction volumes return to pre-credit crunch levels.”
annabel.dixon@estatesgazette.com
