The Spanish market leads the hotel investment in Europe with 30% of the total volume transacted on the continent so far this year, with three transactions among the top five, according to the third edition of the report The Hotel Property Telescope, carried out by the real estate team of the Strategy and Transactions area of EY.
"In contrast to what has happened in the rest of the world, investors from the Middle East have opted for our country as a destination for their investments and have compensated for the fall in the activity of Anglo-Saxon investors", highlights EY.
Among the five most representative hotel deals in Europe, the most significant were the purchase and sale by the sovereign wealth fund of Abu Dhabi Investment Authority (Adia) of the portfolio owned by Equity Inmuebles and operated by Meliá for 600 million euros, the acquisition of the Mandarin Hotel in Barcelona by Olayan Group for 200 million euros and the purchase of the Hotel Reina Sofía in Barcelona by Axa Investment Managers.
Despite the good performance in the first half of the year, EY expects activity to decline in the remainder of 2023 and that the year will end with around €2.5 billion transacted, 22% lower than in 2022.
On the other hand, the performance of hotel assets in Spain during the first seven months of the year has been excellent, improving by 24% on 2019 RevPar data, thanks to the increase in ADR and the recovery in occupancy rates. The hotel market in Madrid has broken records and has set an even more positive trend than in the rest of Spain.
Extraordinary performance of the luxury and super luxury categories
EY also highlights the extraordinary performance of the luxury and super luxury categories, followed by the economy/budget category, in a market in which the extremes are setting the pace and mid-range hotels are losing specific weight and attractiveness for users.
According to the partner in charge of Real Estate at EY, Iván Azinovic, "the resilience of hotel investment in Spain, despite the international context in which we find ourselves, is admirable; the commitment of Middle Eastern investors to our country as a destination for their hotel investments stands out, which demonstrates the confidence in the Spanish market despite the economic uncertainties, so we hope that the forecasts of a decrease in investment for the remainder of 2023 will not have an excessive impact on the good performance in Spain".
In the words of Javier García-Mateo, partner in charge of real estate in the strategy and transactions area of EY, "the data collected in the report highlight the importance of the Spanish market in hotel real estate investment at European level; however, we cannot ignore the situation of uncertainty that we are still experiencing and that, in some way, will affect the sector in the coming months is fundamental".