Luxury hotels were the focus of a major part of investment operations in Spain during the first half of the year. 33% of hotel investment between January and June went into purchasing five-star and luxury five-star establishments, according to a half-yearly investment report by the consultancy Colliers.

Transactions totalled 460 million euros. One particular deal, the purchase of the luxury 116-room Six Senses Ibiza hotel and resort, broke the record price in Spain. The purchaser was Gruppo Statuto, an Italian investor that paid over 1.5 million euros per room.

This same transaction has contributed to boosting the island of Ibiza in the sales ranking. It has also placed the Balearic Islands as the leader, with 30% of total investments. The 12 transactions concluded in the islands have resulted in an investment amounting to 415 million euros. This is followed by Barcelona, with 13 transactions worth 300 million euros, two of them in the five-star luxury category.

Overall hotel investment in the first half of the year totalled 1.393 billion euros, in line with the same period during the previous year, according to the report.  71 transactions in all have been concluded in which a total of 8,350 rooms have changed ownership.

One of the most striking pieces of data during these six months has been the figures showing the assault urban hotels have made to take over the throne that the holiday segment had occupied for the previous five years. 53% of the transactions related to this type of establishment. Also noteworthy is the continuing boom enjoyed by the luxury segment in the investment arena.

Driving cities
The urban segment's assault on the holiday hotel throne has been driven by a number of cities. In addition to the Catalan capital and Madrid, special mention should be made of the 100 million generated by five transactions in Malaga and the 30 million generated by three operations in Granada.. The Eurostars Lucentum in Alicante was in addition, sold for 29.9 million, and the French fund Extendam acquired the Hilton Garden Inn in Seville.

One-off purchases clearly outnumbered portfolio transactions, which are down from 62% last year to 21%. As for buyer profiles, Spanish investors of various types have gained weight during this period: hotel groups, family offices, private investors, investment funds and Spanish REITs (SOCIMIs).

Positive outlook
Looking ahead to the second half of the year, the Colliers report describes a positive outlook in the short and medium term that will continue to benefit investments in the hotel industry. The Managing Director of Hotels at Colliers, Gonzalo Gutiérrez, does not see any large portfolio transactions on the horizon, but believes that “the dynamics of smaller transactions will continue and will allow us to reach normalised levels of 3 billion euros”.

With regard to the period analysed, Gutiérrez stresses that hotel groups and family offices “have provided liquidity to an industry in which the more usual investors, pension funds and private equity investors, were much more cautious in a context of rapidly rising interest rates and tough conditions persisting for a longer period than expected”.

^{Photo: Colliers}