Hotel investment in Spain is experiencing a remarkable upturn, reaching record levels thanks to the influx of sovereign funds. The consultancy firm Cushman & Wakefield predicts that investment in the hotel industry will hover around 4 billion euros in 2023, comparable to the levels recorded in 2018.
Significant transactions, such as the acquisition by the sovereign fund of Abu Dhabi of a portfolio of 24 hotels for 800 million and the purchase of a 35% stake in the HIP portfolio by the sovereign fund of Singapore (GIC), are driving this growth.
Key Details:
- Transaction Pace: Activity remains robust, with year-end closures expected to reach levels similar to those in 2018. 40% of transactions focus on the luxury segment.
- Shift in Dynamics: The increased involvement in luxury assets has raised the average transaction price by 6%, reaching 37 million euros. The average price per acquired room has seen an impressive annual increase of 40%, reaching 255,000 euros per room.
- Trophy Assets: Investors show interest in acquiring assets considered “trophies” despite their high prices. Examples include the Mandarin Oriental in Barcelona, the Palacio del Retiro in Madrid, and The Standard in Ibiza.
International Positioning:
Spain is poised to be the leading European country in hotel investment by the end of 2023, surpassing the UK and France. Despite declines in other top 5 nations like Germany and Italy, hotel investment in Spain has maintained its allure, attracting notable investors such as Petra and Hova and Azora.
Investors’ Perspectives and Comments:
Prominent investors, like Gael Le Lay from Petra and Hova, emphasize that the Spanish hotel market is not yet fully mature in terms of transactions, leaving room for continued growth. It is anticipated that Spain, along with Greece, will lead the hotel investment market in Europe next year.
This surge in hotel investment reflects investors’ confidence in the Spanish market and underscores the vitality of the sector, supported by the strategic entry of sovereign funds into the landscape. We will continue to closely monitor this exciting development in the Spanish hotel industry.
