A recent study shows that the five main tourist destinations of Western Europe added up more than 4,500 million Euros in hotel investment during the first half of 2013.
France, Germany, Italy, Spain and the UK together recorded 54 percent growth in hotel investments compared to the first half of 2012. This is one of the findings of a study published by the consulting firm BNP Paribas Real Estate. The authors revealed that hotel investors mainly focus on estates categorized as ‘prime’. Among these, investors prefer quality hotels at the main getaway locations, and on the other hand, low quality hotels that cannot find a buyer.
The UK continued to dominate the hotel investment market in Europe during the first half of 2013, with 1,900 million Euros, piling up 23% annual growth. London stands out, since the city is perceived as a ‘healthy, strong and safe’ location when it comes to investments.
On the other hand, and regardless of the steady growth of tourism recorded in Spain for the last two years, investing did not transcend to the hotel industry as well as it has in other industries within the country. However, powered by the sale of W Barcelona to a Qatari fund for 200 million Euros, the investment volume grew by about 71 per cent during the first half of this year compared to the same period last year, reaching 330 million Euros.
In France, investment volume in hotels reached 1,300 million Euros during the same period. This amount of investments representing 119 percent increase happened mainly due to the sale of ‘trophy’ assets like Mandarin Oriental and the portfolio of four Concorde luxury hotels, closed during the first trimester.
Germany showed a significant annual increase in hotel investments – 121 per cent, almost reaching 800 million Euros. In this case, the study reveals that the main cause for it was the sale of an important portfolio ‘Queens Moat House’ which includes 20 hotels for an estimated 300 million Euros.
Italy registered a 23% decrease in the investment scope. However, experts assure that in the rest of the year, the sale of ‘trophy’ assets will help them recover in 2013.