Global Hotel Transactions: has the market hit bottom?
|
|
Global Hotel Transactions: has the market hit bottom?
|
Category: Worldwide - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-05-06
1Q09 volumes represent lowest level of trading since 2002
In the first quarter of 2009, global hotel transaction volumes fell to just $1.9 billion, reported
Jones Lang LaSalle Hotels, marking the lowest level of hotel sales recorded since the first quarter of 2002.
Compared to the steep quarter-on-quarter declines recorded in 2008 however, Q109 volumes were only 2.6% lower than that recorded in 4Q08. “This suggests the global hotel transactions market could be hitting a bottom, laying the groundwork for increased activity towards the later part of 2009 when more distressed assets are expected to come to market,” said Jones Lang LaSalle Hotels’ Global CEO Arthur de Haast.
By region, EMEA was the most active market in this quarter, recording approximately $813 million or 42% of all hotel sales within the period. The Americas, which has historically been the most liquid region till the onset of the credit crunch, recorded only $556 million of hotel sales in comparison, followed closely by Asia Pacific at $531 million. Most deals were undertaken in major gateway cities including London, Paris, New Delhi, Washington D.C., Boston, and notably, New York, where three hotel properties were sold within the first quarter of the year.
“While global credit markets are starting to see some signs of thawing, this has yet to fully reach the property sector and the lack of debt continues to shape the current hotel transaction market,” said Mr. de Haast. Only 20% of the hotel transactions closed during this period were above $100 million in deal size; the average lot size of remaining deals was just under $35 million. Equity investors including hotel operators, high net worth individuals and institutions were the most active net buyers in this period.
Continuing the trend from previous quarters, domestic capital is still the dominant source of investment for hotel deals, accounting for over 70% of all transactions closed in the period. Cross border investors however, are showing signs of re-emerging, particularly from Asia. “With the Australian dollar and British pound sterling materially down against major Asian currencies, we are starting to see equity-rich Asian investors taking an increased interest in international opportunities,” concluded Mr. de Haast.
|
|
