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Spain has overtaken the UK as the favorite destination for hotel investors this year, following a series of big hospitality deals in the southern European country, according to CBRE research.
The UK has fallen to second place after ranking at the top of investor lists in the previous surveys in 2018 and 2017, according to the estate agency. Italy, France and Greece are also among the top five destinations for capital deployment this year, according to a 2024 survey of more than 60 investors, including hotel owners, developers and private funds, released this week.
Kenneth Hutton, head of European hotels at CBRE, said: “Spain is thriving, driven by record visitor numbers and strong performance by hotel operators. “Investors see opportunities in both coastal and urban areas of Spain.”
The survey highlights the upbeat mood across the hospitality industry, which is driving the resumption of trading post-pandemic. According to CBRE, more than two-thirds of investors surveyed plan to allocate more capital to hospitality transactions due to strong trading performance and the expectation that lower interest rates will improve financing terms. It is said that he was
The findings follow a series of large-scale transactions in Spain last year. Total investment amounted to 4.1 billion euros, an increase of 30% compared to the previous year and 70% compared to 2019.
Singapore's sovereign wealth fund GIC has acquired a 35% stake in Spain's Hotel Investment Partners from Blackstone Group, while Abu Dhabi Investment Authority, one of Abu Dhabi's sovereign wealth funds, has acquired 17 hotels in the country. Purchased from Equity Inmubles Fund.
Spain will welcome a record 85.1 million foreign visitors in 2023, 19% more than in 2022 and two more than in 2019, before the pandemic.
According to the study, hotel investments accounted for the largest share of total commercial real estate investment in Spain at 36%, up from 18% the previous year.
Meanwhile, hotel investment in the UK fell by 38% to €2.2bn last year, nearly 70% below pre-pandemic levels. In the city-level survey, London maintained its top spot, but Madrid moved into second place, overtaking Paris, which will host the Olympics this summer.
Mr Hutton said the weak level of UK hotel investment was not “a result of a lack of interest” but rather “minimum product being brought to market”.
Investors were nervous about deals as interest rates fluctuated due to inflation, holding off on property sales until they became more stable. Buyers were also cautious, concerned about rising borrowing costs.
“Long-term forecasts for European tourist numbers suggest that the expected level of supply [in the region] It will not be enough to meet this demand,” he added.