Malaga joins the fervor of hotel investment in Spain with 560 million in 2023.

Malaga joins the fervor of hotel investment in Spain with 560 million in 2023.

hotel investment Spain is experiencing a boom period and ended 2023 with revenue of 4.248 million euros, the highest in the last five years. Hotels have become one of the most sought-after real estate assets in the national market, with international funds conducting mega-operations in the Spanish market, as well as with Malaga and Costa del Sol as one of the greatest epicentres of interest. Province registered 560 million euro investment last year, maintaining the good level of the previous year, primarily due to the focus on resort properties on the Costa del Sol. It is therefore the fifth district in Spain after Canary Islands, Balearic Islands, Madrid And Barcelona.

The data was published this Monday by a consulting firm. Coal Miners in its annual investment report and include both funds allocated for existing hotels, as well as funds for real estate for conversion into a hotel and land for hotel construction.

More than a dozen businesses with almost 2,400 rooms are registered in Malaga. Operation sovereign wealth fundSingaporeGIK (acquisition of a 35% stake in HI Partners, Blackstone’s hotel investment company) includes seven hotels in Malaga (Hotel Occidental Torremolinos Playa, Hotel Mett MarbellaEstepona, Hotel Guadalmina Spa & Golf Resort in Marbella, Hotel Barceló Marbella Golf, Hotel AC Malaga Palacio, Hotel NH Malaga and Hotel Vincci Malaga). In turn, ADIA and Meliá’s acquisition of the Equity Real Estate portfolio includes the Meliá Marbella Banús Hotel and the Sol Guadalmar Hotel in the capital of Malaga.

Also worth noting is Meridia Capital’s acquisition of the Molina Lario Hotel; the acquisition by the Catalonia chain of two hotels in Ronda, owned by Unicaja, or the acquisition by the Blue Sea Hotels company, controlled by the Portobello Capital fund, Hotel Royal Al Andalus.

“Province of Malaga we had a good year again thanks to the focus on resort assets on the Costa del Sol. In this sense, the province recorded investment figures at the level of the previous year, reaching 560 million euros, compared to 562 million in 2022. 13% of total investment at the national level“, the managing director of Colliers Hoteles said in an interview with the newspaper. Gonzalo Gutierrezwho is from Malaga.

View of Marbella from Puerto Banus.

These figures have placed Spain on the global podium for hotel investment, behind the United States and ahead of important destinations such as Japan, Australia or Canada. In Europe, it outperformed conventional opponents such as Britain, Germany and France.

Deals concluded in 2023 171 hotels and 21,748 roomscompared to 133 hotels and 17,754 rooms in the previous year. Similarly, 34 transactions were carried out on hotel land and properties intended to be converted into hotels. A continuing trend is observed in investors’ preference for holiday assets, concentrating 65% of the total investment volume for the year.

At vacation level Canary Islands It is the first in the field of investments, having registered 39 transactions amounting to 1.175 million euros (28% of the total investment). Balearic Islands It is also in second place with 39 operations, but with an amount of 796 million euros. In both archipelagos, investment volume was greatly influenced by the mega transaction of the year between GIC and HI Partners, which involved 27 assets in the Canary Islands and 19 in the Balearic Islands.

Madrid, with 21 operations worth 601 million euros, ranks third and concentrates 14% of total investments in Spain. This figure was positively impacted by the purchase of the Equity Real Estate portfolio and also reflected individual asset transactions such as the purchase of Autograph Collection Palacio del Retiro acquired by the family office of John Riberas (Gestamp), the sale of HI Partnership with Limestone Capital in the Axel Hotel Madrid or the sale by Mazabi of the L&H Gran Vía Selection Hotel on the recommendation of Colliers.

Barcelonafor its part, stands out in 2023 by doubling its investment volume compared to 2022, registering 11 transactions totaling €582 million and registering the two largest single asset transactions recorded on the market this year: the acquisition of Mandarin Oriental. by the Saudi Arabian Fund Olayan, as well as the purchase of Blasson and AXA IM of the Sofía Hotel.

‘Unprecedented’ hotel investment

“Tourism and hotel business in Spain lives unprecedented fervor at the investor level. In 2023, there was a real consolidation of international interest in our hotel market. With an investment volume of over 4 billion, it is second only to the American giant, the United States, which is obviously playing in a different league and whose hotel investment market will be around $23 billion in 2023. Other traditionally very powerful countries such as the UK, Japan, Canada or Germany have not been able to surpass the investments accumulated by Spain, remaining in most cases in volumes well below 3 billion, explained the head of the hotel segment of Colliers. Laura Hernando

.

He said it was too early to tell whether this was an exceptional situation in a year marked by uncertainty, but Colliers believes the market will “continue to attract investment capital and gain leading investment positions around the world in the coming years.” ” “.

The importance of portfolio transactions

Portfolio operations were the protagonists of 2023, with the three most important ones adding around €2 billion in investments. A total of 11 transactions covered 110 hotel assets and 14,320 rooms with a total investment of €2,615 million. This amount is equivalent to 62% of the total and reflects an “impressive” increase of 94% compared to 2022.

Materialized transactions have arisen in a variety of contexts: investments in consolidated companies, creation of new ones, portfolio rotations, or financial distress, among others.

The most important transaction was the acquisition of a 35% stake in HI Partners. Investment vehicle at the Blackstone HotelSingapore sovereign fund GIC, whose portfolio includes 60 assets.

In addition, they emphasize the acquisition ADIA and Melia from the Equity Inmuebles portfolio (17 hotels and more than 2,500 rooms); Banca March, Morfeo Hoteles, acquisition of a stake in a portfolio of three assets owned by Starwood Capital and sale, on the advice of Colliers, Complex Marina d’Or in a consortium formed by Magic Costa Blanca and Grupo Fuertes.

Purchase prices are consolidated.

During 2023, despite the macroeconomic situation and rising interest rates, average room prices in transacted hotels rose to €182,900 per room (8.4% more than in 2022). This is due to the sale of prestigious assets such as the Mandarin Oriental in Barcelona or the Autograph Collection Palacio del Retiro in Madrid, which exceeded the one million euro mark per room.

International investors monopolized the majority of hotel investment, with transactions worth 3.188 million, equivalent to 75% of the total annual volume. However, it is necessary to note the key and driving role of the national investors themselves, who were the initiators of the largest number of transactions, closing 81 out of 107 (76%) transactions worth €1,061 million.

Investors in this group include Banca March, Meridia Capital, Gestamp, Guidebridge, Magic Costa Blanca and Grupotel.

Prospects for 2024

2024 will mark ten years since Spain became the focus of institutional and international investment in the hotel industry. Since the 2 billion barrier was broken in 2015, the figure has never dropped again (with the exception of 2020, which was radically impacted by the pandemic), and Colliers believes “2024 will be no different.”

“Spain has undoubtedly entered into virtuous circle at the hotel level

which has allowed it to weather the recent storms while maintaining a strong course and has managed to move closer to the spotlight of more and more investors who are starting to view the hotel leisure segment as an asset class to add to their portfolios in the future. short, medium and long term,” says Hernando.

Added to this is the natural need to rotate the assets of investors who have come in these years, and the increasingly approaching generational change of medium and small Spanish chains. “Most likely we will be present very dynamic 2024 and are only waiting for an adjustment in the cost of financing that will make it easier to reach a consensus on the valuation of the assets,” says Colliers.