Hotel investment volumes reached us $40.4 billion last year, according to global property consultants Jones Lang LaSalle.
In its most recent Quarter-4 2014 Global Market Perspective the firm offered investors a valuable insight into what is happening within the global hotel investment market.
“During the first three quarters of 2014, hotel investment volumes reached US$40.4 billion, the highest year-to-date total since 2007 and an 8% increase on the same period last year,” revealed JLL.
“Capital markets activity in the hotel sector is strong. Hotels’ income growth continues on a steady upward path, lenders’ confidence in the sector has returned, and sellers are motivated given the wide audience of buyers.”
Threats within the hotel investment market
The findings of the JLL research weren’t all positive, however. The firm noted the impact that the deadly Ebola outbreak in West Africa is having, as well as the struggling economies of Europe.
The research also reported on the geopolitical risks in the Middle East and the effect that this has had on volumes, however it is also worth noting that certain regions such as Dubai and Abu Dhabi have arguably benefitted from these instabilities. Shayne Nelson, CEO of Emirates NBD, for example, recently said:
“The UAE is seen as a very stable economy, well governed, well managed, and secure and we have attracted investments from Syria and Iraq because of it,” said Shayne Nelson.
“Dubai and Abu Dhabi, as places of flight to safety, have done extremely well out of that conflict with people buying apartments and coming here as tourists rather than places they might otherwise have gone to.
“An unfortunate positive [of the conflict] is that the UAE as a safe haven will continue to attract investments while these conflicts are going on.”
Dubai’s first open market hotel transaction
In other news in the Dubai hotel investment market, Jones Lang LaSalle has reported that it has advised on Dubai’s first open market hotel transaction.
The company revealed in early January 2015 that it has completed the sale of Movenpick Hotel & Apartments in Bur Dubai for the sum of $95 million. The property was sold to leading UAE investment group Kingdom Hotel Investments.
“This is a landmark transaction in the UAE hotel investment market that was successfully completed and supported by the depth and breadth of JLL’s global network” said Amr El Nady, Vice President JLL Hotels & Hospitality.
“The sale represents a significant milestone for JLL in the region as it is the first open market hotel transaction to have taken place in Dubai. It follows the sale of Movenpick Jumeirah Beach Residence earlier in the year in a transaction also conducted by JLL and highlights the appetite that exists from the investment community for strategic investment opportunities within Dubai’s vibrant tourism market.”
In its news release JLL comments further on the hotel investment market within Dubai. It said that it expects Dubai to continue its growth of performance levels over the next three to five years, with the emirate benefitting greatly from the corporate, MICE and leisure sectors.