Hotel investment in Spain reached €3.2 billion in 2021, the third-highest figure on record after 2017 and 2018, according to research from Colliers.
The pipeline of deals in progress, with volumes approaching €1.5 billion, indicates that the trend is expected to continue during the first part of 2022.
Last year, a total of 127 hotels and 22,249 rooms changed hands in Spain, versus 68 hotels and 7,228 rooms in 2020. Another 18 transactions took place for hotel development land and properties to be converted into hotels.
Barcelona and Madrid were once again the leading urban destinations with €760 million and €468 million respectively, accounting for almost 39% of the total, or €1.2 billion, for the second consecutive year.
Significant deals, such as the sale of the Hotel Sofía and Expo, as part of the sale of Grupo Selenta to Brookfield; the NH Collection Gran Calderón acquired by Lasalle Investment; and the Grand Hotel Central and the former Tryp Apolo, both acquired by Schroders, are just a few of the 23 transactions, which led Barcelona to reach its highest annual figure.
Madrid, with 10 transactions, recorded the largest single asset transaction. Hotel Edition was acquired by Archer for over €200 million, the highest price paid per room. Listed Mexican real estate firm RLH Properties acquired the 111-room, 27 of which are suites, Bless Hotel from Raphael Ardid’s Grupo Didra and Aina Hospitality, for €115 million (€1.03 million per room).
In the holiday segment the Canary Islands and the Balearic Islands were the main destinations, totalling €633 million and €541 million respectively, representing 37% of total investment.
The year saw a revival of portfolio transactions as 12 changed hands , comprising 56 hotels and 9,375 rooms for a total volume of €1.2 billion. These include Brookfield's purchase of Selenta Group for €440 million, Riu's acquisition of the minority position held by Tui in its joint venture, Meliá's sale of a majority stake in its Victoria Hotels & Resorts company to Bankinter's private banking investors and Castlelake's entry into the capital of Socimi Millenium Hotels to boost its growth.
Investment by international funds reached €1.8 billion, representing 58% of the total. Most of these players are core or value-added managers such as Brookfield, Archer Capital, Schroders, Castlelake or LaSalle Investments which are firmly in the Spanish market.
Aftera record-breaking 2021, the outlook for the new year is very positive considering a pipeline of deals in progress with volumes approaching €1.5 billion.
“Overall, we believe that the trend of the past year will continue and that, with a few exceptions, we will not see many distressed transactions,” said Laura Hernando, head of hotels at Colliers in Spain.
“As already observed, quality assets have weathered the storm best and will continue to do so. The market fundamentals are very positive, including the country's global leadership in tourism, strong investor appetite, excess liquidity with interest rates at historic lows, high purchasing pressure and plenty of repositioning opportunities."