Spain is breaking hotel investment records

Hotel investment in Spain grew by almost 80% in 2017 compared to the previous year, the best historical record, according to a report by the consulting firm Irea. Although more moderate, the forecast for this year also shows an upward outlook, especially in Madrid, but not so much in Barcelona, due to the political situation.

According to the study, the investment figure amounted to 3,907 million euros, which is 78.9% more than the previous year. Overall, 182 hotels were purchased, 35 more than in 2016, totaling 28,813 rooms. The volume of investment in existing hotels was ?3,429 million, 57% more than in 2016, which recorded an investment of ?1,985 million.

Regarding the volume of investment in real estate 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 land purchases for hotel development pr almost tripled to ?97 million.

The volume of the six major transactions recorded in 2017 amounted to ?1.450 million, 40% of total commercial real estate investment, with the ?630 million derived from the purchase of 14 HIP hotels by Blackstone at the top. 

49% of the total invested came from foreign investors of this same profile to the detriment of socimis and reits, which accounted for 12% of the investment, or 467 million. The national investment stood at 1,528 million euros, 39% of the total.

The report also notes that Madrid is playing a determining role“against the loss of specific weight of Barcelona”. This translated into a hotel investment of 637 million euros in the Spanish capital compared with 422 million in Barcelona.

By autonomous communities, the highest volume of investment in existing hotels was in Canary Islands, with 939 million euros, followed Balearic Islands, with 568 million.Málaga Málaga is in third place, with 516 million euros. Cataluña and Madrid registered 522 and 349 million in investment in existing hotels.

In2018 the consultancy predicts that Spain will reach second place, behind the United Kingdom, in European investment. While it does not offer a specific figure, it says asset price increases “will moderateán” in 2018. It also notes that the strong buying pressure will continue to motivate hotel owners to sell.