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Hotel investment in Spain drops 51% in 2019 after two record years
13 January 2020 | Observatorio Inmobiliario

Hotel investment in Spain reached 2.500 million euro in 2019, 51% less than in 2018 (4.900 million euro) and 24% less than in 2017 (3.750 million euro). Both those years represented record high numbers, according to the data from real estate consultant CBRE.

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CBRE states that, in 2019, 126 hotel assets were traded, which represent approximately 15.000 rooms and 3.200 future rooms in buildings, plots of land and projects sold.

The Head of Investment Properties for Continental Europe at CBRE Hotels, Miguel Casas, pointed out that «the Spanish hotel segment closed a year of moderate trade, with levels of investment similar to those of 2015 and with significant changes in terms of the investors’ behaviour when compared to 2018».

Casa explained that last year most investment was destined to individual assets, which represented 72% of all investment, whereas assets belonging to portfolios represented 28%, 65% less than in 2018. The main reason for this behaviour was the reduction in corporate operations. Furthermore, many investors opted to invest in urban assets (51%), while the holiday segment decreased to 49%.

In terms of the investors’ profiles, hotel groups represented 32%, followed by private and family office investors and institutional investors, both with 29%.

4 star hotels received most of the investment

The hotel category to receive most investment last year was the 4 star hotels (59%), followed by 3 star hotels (15%) and 5 star hotels (7%). 1 and 2 star hotels registered the least investment with 2%.

By regions, Madrid led the list of the main destinations with 18% of all investment, followed by the Balearic and the Canary Islands with 17% and 14% respectively. The fourth place was taken by Barcelona with 15%, followed by Malaga with 9% and Valencia with 8%.

The Portfolio Medplaya, The Gates Hotel Diagonal Barcelona or the W Madrid are some of the main operations carried out this year in Spain. CBRE Hotels assessed exclusively the sale of 11 hotels during 2019, for a total 285 million euro. Amongst them, stood out the Aloft Madrid Gran Vía, the Exe Moncloa, the Tryp Chamartín, the Cartera Sercotel and the Travelodge Valencia.

For 2020, the Head of Hotels for Iberia at CBRE España, Jorge Ruiz, assured the year will be marked by the beginning of a new tourist and hotel cycle. Events such as the bankruptcy of Thomas Cook and Brexit, will be followed by a change in trend, which will include «the expansion of mixed and disruptive accommodation formats, digitisation and big data, the expansion of the hostel segment, hyper segmentation and the development of new brands (especially international brands)», he explained.

Casas pointed out that «some of the factors which will keep influencing the trading activity in our country are the low interest rates, the high fragmentation which still exists within the hotel segment, the growing interest for the secondary markets which offer higher yields and the existence of certain framework agreements between investors and hotel operators».