The Canary Islands took the lead in hotel investment in existing properties last year with a total of 939 million, followed by the Balearic Islands, with 568 million, Malaga in third place with 516 million and Catalonia and Madrid, which registered 522 and 349 million in investment in existing hotels. In total, hotel investment in Spain was 3.907 million euros in 2017, 78,9% more than the previous year, according to a study conducted by the consultancy Irea, which stresses that it is “the best historical record of investment Hotel in Spain “unseating the year 2015, when they reached 2.614 million euros.

Therefore, in the presentation of the report this Thursday in Madrid, the founding partner and director of the hotel area of ​​the consultancy, Miguel Vázquez, said that this year for Spain has been, “as an extraordinary power”, of “absolute record”. Altogether, 182 hotels were purchased, totalizing 28.813 rooms, 35 more than the previous year, which were 147 establishments and an offer of 21.646 rooms. The volume of investment in hotels already existing in 2017 amounted to 3.429 million euros, 57% more than in 2016, which recorded an investment of 1.985 million. Regarding the volume of investment in buildings for conversion to hotel use, it reached 478 million of the total, an increase of 41% compared to 199 million in 2016. The volume of purchase of land for hotel development almost tripled up to 97 million of euros.

Rise of 41% in the price per room

It should be noted that this increase in land transactions, after four years without registrations and only two operations in 2016, reached 12 in 2017, which according to Vázquez is a sign of “confidence on the part of hotel promoters”, who understand that “It makes sense to start building new hotels. ” The average price per room – result of dividing the investment figure between the number of hotels – in 2017 was 119.000 euros, above the 91.000 euros in 2016. Vázquez has pointed out here a “very remarkable” growth of 41% from the 85.000 euros of 2015, which represents a trend whereby the first purchases were assets for repositioning that begin to be sold at high prices after its reform.

As he observes, “a new investor, different from the previous one, enters the market, as he saw the opportunity and assumed the risk, while the one who comes now buys a repositioned asset with a different mentality that seeks returns of 5%, 6% or 7%”.

“Effect called” in foreign capital

Thus, the volume of the six main operations registered in 2017 amounted to 1.450 million euros, 40% of total commercial real estate investment, with the 630 million derived from the purchase of 14 HIP hotels by Blackstone in the first place. The person responsible of Irea has highlighted that this latest transaction by a specialized investor such as Blackstone, coupled with the purchase of 4 Meliá hotels by London & Regional, has been “significant” and “will not go unnoticed for other funds” in 2018. In his view, this effect “will preside the trend” this year. 49% of the total investment, 1.871 million, comes from foreign investors of this same profile to the detriment of the Socimis and Reits, which represented 12% of the investment, 467 million, compared to 25% in 2016. Irea highlights that the bulk of foreign investment, in a proportion of 61% of the total, amounted to 2.379 million euros, being “those who are putting gasoline” to the Spanish market.

The volume of national investment amounted to 1.528 million euros, 39% of the total. The expenses of hotel chains reached 644 million euros, 16% of the total, while national investors contributed 884 million, 22%.

Source: Canarias 7 – 11.01.2018