Hotel Investment in Spain Reaches €960M in 2020

Main Photo: The Mandarin Oriental Barcelona, one of the hotels up for sale in Spain

Date: January 2021

Location: Spain

No. of Keys: 6,000 plus

Who Said What: During 2020, marked by the COVID-19 pandemic, transactions worth €960m have been registered in the hotel sector in Spain, 61% less than in 2019, according to data from the real estate consultancy CBRE.

In total, 77 hotel assets have been transacted, totalling more than 6,800 rooms and 2,000 future rooms in buildings, plots and projects sold. The investment volume is 61% lower than that registered in 2019 (€2,500m) due to the situation caused by the health crisis and the stoppage caused in the months of confinement, although the consulting firm affirms that the activity of the fourth quarter of the year allows improvement expectations for 2021.

Jorge Ruiz, Head of Hotels Iberia at CBRE Spain, made a resume of the year: “2020 started positively, adding 14% more investment volume compared to the first quarter of 2019. However, with the arrival of the pandemic, factors such as the great uncertainty of the markets, the scarcity of bank financing, the slowdown in operating activity and the difference in price expectations between buyers and sellers have caused total investment during 2020 to be reduced by 61% compared to the volume registered in 2019”.

In 2020, 74% of investment has been allocated to individual assets, while assets from portfolios have captured 26% (up from 21% registered in 2019). While last year investors opted more for business assets (55%) than leisure (45%), in 2020 the trend has been reversed and the leisure has monopolized 61% of investment. The Balearic Islands top the list of main destinations this year with 34% of total investment, followed by Barcelona (18%) and the Canary Islands, with 13%. The fourth place is occupied by Madrid (11%), which in 2019 was the main investment destination.

Regarding the investor profile, the highest percentage comes, unlike 2019, from institutional investors (44%), which in 2019 accounted for 29%. In second place are private investors, family offices and real estate companies or other sectors, with 37%, followed by hotel groups (16%), which last year were at the top (38%). The hotel category to which the most investment has been allocated this year are 4-star hotels (38%), followed by 5-star and luxury hotels (33%), whose investment exceeds the 11% registered in 2019. 3-star hotels represent 9% of the volume.

THPT Comment: All things considered that’s not a bad record for Spain, which is definitely showing sign of some of the best bargains…otherwise known as “the Covid discount”.

First Seen: Iberian Property

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