Global Hotel Deals to Hit $70bil by End of Year
DECEMBER 20, 2006. Jones Lang LaSalle Hotels estimates that global hotel transactions are set to hit the $70 billion mark by the end of the year. The figure marks a 38% rise on last year's figures, making 2006 the strongest year on record.
The 13th issue of the Hotel Investor Sentiment Survey (HISS) reveals that the appetite for hotel real estate remains strong. "Buyers outnumber sellers by 3:1 globally and stock is scarcer still in Europe where buyers exceed sellers by 5:1," said Arthur de Haast, Global CEO, Jones Lang LaSalle Hotels.
The survey which tracks investor sentiment, has found that there is an exceptionally positive outlook for the Asia Pacific region and investors are very keen to trade in Western Europe where London and Paris are firm favourites. However, in the medium term investor expectations for the Eastern European market are much stronger.
'Along with trading optimism there has been a tightening in average yields globally which has emerged as a result of a positive economic climate plus substantial capital in the market, limited new supply, increasing transparency and ongoing improvements in hotel trading performance. In Europe and Asia we have seen the first signs of yield stability', said Arthur de Haast. The CEE markets particularly Zagreb, Prague and Moscow are driving this trend, causing yields to rise despite improvements to the perceived risk profiles of these markets as well as growth expectations.
Arthur de Haast, comments: "It is clear that some investors remain confident of even better times ahead as they continue to hold their assets in this strong seller's market. Investor sentiment in building new hotels has increased by nearly 7% since our last HISS 6 months ago, a reaction to the slow supply of assets coming to market and the fierce competition for these assets which continues to drive pricing upwards."
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