The outlook for additional hotel development in Latin America continues to be positive, according to Jones Lang LaSalle Hotels‘ first Latin America Hotel Investor Sentiment Survey. Respondents were most bullish on most bullish on Mexico City, Brazilian metropolitan areas, Los Cabos, and Cancun/Riviera Maya, along with markets in Colombia and Chile.
Targeted capitalization rate (initial yield) for the acquisition of an international-grade hotel averages 10.2 percent across the region. Hotel assets in gateway markets represent the biggest “buy” targets, while the highest sentiment to “build” new hotels is reported for secondary cities. The survey also suggests a considerable increase in the number of investors reviewing development feasibility in markets outside of the countries’ capital cities.
“With a population of nearly 600 million, we expect the region’s hotel investment market to transform itself over the next decade,” says Clay Dickinson, EVP for Jones Lang LaSalle Hotels Latin America region. “And hotel investors are responding with an exceedingly positive outlook for both investment and performance in the short and medium term for many countries in the region.”
