The hotel sector leads the real estate investment in 2023 with a volume of 4,100 million euros and concentrating more than 35% of the total, which is the second year with the highest investment in the historical series, only behind 2018, when it reached around 5,000 million, according to data from CBRE.
Spain has been one of the most dynamic markets in Europe, with more than 105 million visitors up to November and leading hotel investment in the first nine months of the year with 26% of the total, ahead of France (24%) and the UK (15%).
In 2023, more than 180 hotel assets with more than 20,000 rooms were transacted in Spain. Investors continue to maintain an "unquestionable" preference for 4 and 5-star hotels, with 4-star assets accounting for 59% of the total invested, and 5 and 5-star GL assets for 25%. Among the assets transacted in the luxury segment, the Sofia and Mandarin Oriental hotels, both in Barcelona, stand out.
In terms of asset type, the holiday segment attracted the most investor interest in 2023, accounting for 65% of capital compared to 35% in the urban segment. The Canary Islands accounted for 29% of the total volume transacted, followed by the Balearic Islands (18%), Madrid (15%) and Barcelona (13%).
Regarding the predominant investor profile, this was led by institutional investors, with more than 70% of the total volume, among which sovereign wealth funds stood out, with more than half of the total invested in 2023, while private investors accounted for 13% and hotel chains undertook 11% of the total investment.
In terms of the origin of the capital, international buyers dominated the market, accounting for 75% of the total, with Saudi Arabia, the United Arab Emirates and Singapore accounting for almost 60% of the total volume.
The whole of 2023 was marked by large portfolio transactions, with a total of 11 hotel portfolios accounting for 64% of the investment (more than EUR 2.6 billion).
Of note in the fourth quarter was the acquisition of 35% of the HI Partners portfolio (owned by Blackstone) by the Singapore sovereign wealth fund GIC, as well as the purchase by the Abu Dhabi Investment Authority (ADIA) in the third quarter of the Equity Real Estate portfolio. As a result, the second half of the year accounted for 65% of the total investment in the hotel sector in 2023.
Hotel recovery
Furthermore, the operating results of the hotel industry during 2023 confirm the full recovery of hotel and tourism activity in the country, which improve on the levels of 2022 but also exceed those of 2019, according to CBRE.
Specifically, the average price per occupied room (ADR) stood in November at 110.15 euros (+9% compared to 2022) and the average revenue per available room (RevPAR) reached 75.57 euros (+16%).
Prime hotel rental yields increased 25 basis points in the fourth quarter and 50 basis points for the full year as a whole, standing at 5.25% in Madrid and Barcelona, and 6.25% in the Islands.
