2/9/2022

New Christie & Co Hotel Investment Overview, Spain 2021: a total volume of investment of EUR 3,190 M registered, a figure 3.5 times higher than the investment in 2020

Christie & Co publishes its new Hotel Investment Overview for 2021, the year of the beginning of the sector's recovery, presenting investment results higher than 2019, and approaching the all-time record figures of 2018.

According to the report, investor trust in the resilient Spanish hotel sector and the gradual return to normality have allowed a return to pre-Covid investment levels in 2021, exceeding the 2020 figures by 255%.

In 2021, a total volume of investment in the hotel sector of EUR 3,190 M has been registered, a figure 3.5 times higher than the investment in 2020. This strong increase has meant the recovery of the pre-covid-19 crisis levels, coming closer to the 2017 and 2018 figures and even surpassing the 2019 data by 35%. On the other hand, the total number of rooms transacted was 22,523, spread across 130 assets, including both existing and future rooms in conversion and development projects (vs. 8,300 rooms and 67 assets transacted in 2020).

The analysis of the destination of the investment indicates that, unlike the previous year, the volume is more concentrated in the urban segment, with 53% of the total. Barcelona, and to a lesser extent Madrid, accounted for most of the investment in the urban sector, while the Balearic Islands and, above all, the Canary Islands stood out in the resort sector.

In terms of investor profile, management and investment firms account for the majority of transactions, both in terms of portfolios (around 70% of the total) and individual assets (around 65% of the total). On the other hand, the gradual recovery during the year led to an increase in investment activity by hotel groups (+33%) and socimis (+150%) compared to 2020, especially focused on the resort segment in the first case and on urban assets in the second.

The geographical origin of the investment underwent significant changes, with domestic capital recovering part of the prominence lost during 2020, with 42% of the total volume invested, 55% more than in the previous year, when it had reached 27%. American capital (18%), with the portfolios acquired by Sixth Street and Castlelake, and Canadian capital (14%) from the purchase of the Selenta portfolio by Brookfield, also stood out.

One of the reasons for the large investment volume achieved in 2021 is the return of portfolio transactions, which had been rare since 2018.

The high number of core transactions and prime assets sold, mainly in sale & leaseback and sale & management back structures, is another reason for the high investment volume recorded. In fact, strong competition for these high quality assets drove prices per room to historically high levels, even breaking the million euro mark in luxury hotel transactions in Madrid.

In conclusion, 2021 can be considered a very good investment year for our tourism industry.

Edgar Ollé, Managing Director of Christie & Co in Spain and Portugal, states "2021 will be remembered as the year of the beginning of the recovery of tourism, the growth of hotel investment, the return of portfolio transactions and prime transactions at record prices per room. In our opinion, 2021 has marked the definitive institutionalisation of the hotel sector as an international investment product".

Coré Martín, Head of Investment, adds: "Available liquidity is at levels never seen before and the appetite for all types of hotel assets, from economy to luxury, and in all destinations, urban and resort, has never been greater. The low yields provided by other real estate sectors and other European destinations make the Spanish tourism sector currently one of the priority real estate investment targets of the international investment community".

As for the outlook for the coming year, Íñigo Cumella, Investment Associate Director, and author of the report, predicts: "We expect 2022 to be another year of intense investment activity in the hotel sector for all players and in all segments, with possible corporate operations and a growing institutionalisation of the activity."

You can dowload the full report here.