Jones Lang LaSalle Hotels (JLLH) has released its Q2 statistical analysis of the global hotel investment market, which reveals that $14.8 billion in hotel assets changed hands in the first six months of 2011. Compared with the same period last year, this represents a 117 percent increase, which JLLH posits is driven by the easing levels of liquidity, improved hotel trading performance, and banks’ actions to speed up workout programs. The firm forecasts that global hotel investment will reach $34.8 billion, marking a 28 percent year-on-year increase.
The Americas registered a 187 percent year-on-year upsurge with transaction volumes totaling $7.4 billion in the first six months of 2011. “Investors are aggressively re-entering the hotel market,” says Arthur Adler, managing director and CEO-Americas for JLLH. “Real estate investment trusts (REITs) have been trading at strong multiples and have been able to access the equity markets, while private equity funds have raised significant sums of capital and the debt markets are more active, which has led to the significant increase in activity. We now project full-year hotel trade levels to reach $16 billion, up from our previous forecast of $13 billion.”
“Big-ticket sales are back. The firm tracked 14 sales that transacted above the $100 million mark in 2011, the third-highest amount ever for the first six months of the year,””adds Bob Webster, managing director of JLLH.
New York City is at the forefront of this year’s deal volume. Hotel transactions in the amount of $2.1 billion have closed in the city thus far in 2011. Based on the pipeline of deals in the market, such as the 597-key Paramount Hotel, deal volume is on track to potentially reach $4 billion this year-the highest level single-asset volume on record for Manhattan.
A total of $4.7 billion in hotel transactions took place in Europe, Middle East, and Africa (EMEA) in the first half of 2011, marking an 84 percent increase on the same period last year. Activity accelerated as a result of a marked increase in the number of assets going into administration. In Asia Pacific, deal volume totaled $2.6 billion, a 59 percent increase on the prior-year period.
