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News Release

London - Moscow

EMEA Hotel Market Recovery Boosted by Growth in Investor Confidence

According to Jones Lang LaSalle Hotels Latest Hotel Investor Sentiment Survey


London - Moscow, 27 May 2011 - The hotel market  in EMEA is perceived to be firmly on a path to recovery according to Jones Lang LaSalle Hotels'  latest Hotel Investor Sentiment Survey. Improved market conditions have prompted investors to explore hotel investment opportunities, particularly throughout Western Europe. Only the Middle East and North Africa (MENA) reported negative short term expectations, driven by political difficulties.

Mark Wynne-Smith, CEO of Jones Lang LaSalle Hotels in EMEA, said: “Trading performance across the EMEA hotel market has strengthened substantially over the past six months. Germany has taken the lead in EMEA on medium term performance expectations with Munich and Hamburg noting the strongest expectations. In the UK, the majority of growth is driven by London. While expectations for UK regional cities are currently subdued, investors expressed a more pronounced improvement over the next two years, with the top performer expected to be Edinburgh.”

Only a few cities in Europe are anticipated to face further hardship, the majority of which are located in Eastern Europe. Nevertheless, overall trading performance expectations for Eastern Europe improved notably compared to the last survey in October 2010, driven by Istanbul, Moscow and Warsaw, while results for MENA were more diverse.  On a city level, strongest growth in the medium term is anticipated for London, Paris, Istanbul, Rome and Munich.

Wynne-Smith continued: “Tourism in Istanbul, Moscow and Warsaw has expanded rapidly in recent years, encouraging international branded operators and investors to find a foothold in the market to benefit from the market’s growth potential. Across MENA the hotel market in some cities is currently suffering from political unrest while others continue to struggle with oversupply in a weak, albeit recovering, tourism market. The key gateway cities remain consistently resilient, and investors’ yield requirements have hardened by a further by 40 basis points over the past six months as investors remain confident that these markets will continue to provide income growth”.

Wynne-Smith continued: “While a level of cautiousness remains, buy intentions have once again become the key sentiment in investor’s minds and this reflects the strong investment appetite during Q1 with EMEA investment volumes increasing 160 percent compared to Q1 2010.”

Key markets that will continue to be targeted include Madrid, Rome, London, and Paris, with Stockholm and Copenhagen set to benefit from rising corporate spend. Asset preference in these markets is focused on upscale and mid-scale hotels, while luxury assets are favoured in MENA and Eastern Europe.

Improving market conditions and growing investor confidence have resulted in a more favourable position for sellers in the Western European market. The survey has shown that there is a significantly higher number of buyers to each seller for markets such as London and Paris but this trend does weaken markedly for the secondly cities. During the remainder of 2011 as confidence continues to rebound, Jones Lang LaSalle Hotels expects to see a move towards secondary locations or outside of Western Europe in search of improved total returns. 

Alex Slesar, Head of Hotel Investments, Executive Vice-President Jones Lang LaSalle Hotels Russia & CIS added:  “Russian and regional investors remain the most active buyers on the market with international investors beginning to show tangible interest predominantly towards the quality assets.  Hotel market performance across Russia continues recovery at a good pace, in particular with internationally branded and well-located hotel properties.  We expect to observe an enhanced investor activity in Q2 with a growing volume of acquisitions in Moscow and St. Petersburg, as well as the key regional cities towards the end of 2011”.

Marina Smirnova, Senior Vice-President Jones Lang LaSalle Hotels Russia & CIS explained: “Hotel  RevPar  growth  due to ADR increasing along with enhanced demand for Moscow hotels became a strong trend at the beginning of the year. St. Petersburg hotel market is also demonstrating RevPar growth in Q2, however unlike Moscow market it was mostly stimulated by growth of occupancy only”. 

Wynne Smith concluded: “All the signs are that investors will be seeing more hotels being offered for sale in the second half of this year as sellers take advantage of the improved market conditions.”


About Jones Lang LaSalle Hotels
Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide the depth and breadth of advice required by hotel investor and operator clients, through a robust and integrated local network. In 2010, Jones Lang LaSalle Hotels provided sale, purchase and financing advice on $4.1 billion worth of transactions globally. In addition, advisory and valuation services were provided on over 1,000 assignments. The global team comprises over 210 hotel specialists, operating from 37 offices in 19 countries. The firm's advice is supported by a dedicated global research team, which produced 70 publications in 2010 in addition to client research. Jones Lang LaSalle Hotels' services span the hospitality spectrum; from luxury single assets and large portfolios to select service and budget hotels, resorts and pubs. Services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator selection, management contract negotiation, consulting, industry research and project development services. Jones Lang LaSalle Hotels' clients have access to the resources of its parent company, Jones Lang LaSalle (NYSE: JLL). www.joneslanglasallehotels.com



About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of $2.9 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 167 million square meters worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with approximately $41 billion of assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg, Kiev and Almaty. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010 and 2011 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg. For further information, please visit our website www.joneslanglasalle.ru