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News Release

Moscow

EMEA Hotel Investment Volumes in 2011 totalled €8.1 billion

According to Jones Lang LaSalle Hotels’ latest Hotel Investment Highlights Report


London-Moscow, 11 March 2012 – 2011 proved to be another active year for both investors and hoteliers in Europe, the Middle East and Africa (EMEA) despite increasing uncertainty surrounding the Euro crisis in the second half of 2011. At year-end, investment volumes across the region totalled €8.1 billion, a 5% increase on 2010 levels according to the Hotel Investment Highlights report by Jones Lang LaSalle Hotels. Hotel investment volume in Russia increased almost 7 times.

Jonathan Hubbard, CEO Northern Europe Jones Lang LaSalle Hotels said, “In 2011, the market saw a flight to quality. Trophy assets in key gateway cities achieved record prices, widening the pricing gap between primary and secondary assets. Major trophy hotels were acquired by Middle Eastern and Asian investors, primarily high-net-worth-individuals (HNWIs) and sovereign wealth funds, despite the high costs per key and the low yields achieved in such investments.” See diagram 1.
 
2011 saw a growth in portfolio transaction volumes, which increased by 16% compared to 2010, up to €3.29 billion. This growth was underpinned by the sale of two hotel portfolios, the Mint and the European InterContinental portfolios, which sold for €698 million and €450 million respectively.

Christoph Härle, CEO Continental Europe Jones Lang LaSalle Hotels commented: “Despite the marked improved growth in portfolio transactions across the year, the majority of transactions were single asset deals which accounted for 60% of the entire hotel investment volume in 2011. Around 78% of all transactions had a purchase price below €50 million, with only 3% being above €200 million.”

The most liquid market in EMEA was again the UK, with a total transaction volume of €2.9 billion at year end 2011. In second place was France with a transaction volume of €1.1 billion, followed by Germany with a transaction volume of about €800 million.

Hotel transaction volume in Russia amounted to $0.9 billion (about €700 million) in 2011. Compared to 2010 investment volume increased by 7 times generally due to one big deal. Investment deals in Russia were completed only with single hotel assets. The sale of Ritz-Carlton Moscow hotel became the remarkable deal for Russian market; moreover, it was ranked among the biggest hotel transactions in Europe. Last year was completed with another big deal – auction sale of National hotel in Moscow.

Alex Slesar, Executive Vice President, Head of Investment Russia&CIS, Jones Lang LaSalle Hotels, said: “With the expected supply in hotel investment sector we predict transaction volume in 2012 in Russia will remain at the level of last year or will even exceed it. Several outstanding hotels both in Moscow and regions will be offered to the investors this year. 2012 may distinguish itself by the completion of first hotel portfolio deal that has never been in Russia before.”

Jones Lang LaSalle Hotels predicts hotel transaction volumes in EMEA to remain stable at roughly €8.1 billion in 2012.

About Jones Lang LaSalle Hotels

Jones Lang LaSalle Hotels is a global real estate services firm focused exclusively on hotels & hospitality. We provide acquisition and financing advice, valuations, investment sales and asset management for luxury hotels, select service and budget hotels, smaller hotels and pubs, from single assets to large portfolios and mixed-use developments.

In the last five years we completed nearly 4,000 advisory and valuation assignments and more sale, purchase and financing transactions than any other hotels real estate firm in the world…worth over $30 billion. With 42 offices in 20 countries, no other firm is better connected. Through our depth and breadth of research and experience we know the market at every level, we know the players and we know how to get results.

For further information, please visit our website www.joneslanglasallehotels.com