This year is expected bring a record $110 billion in global hotel transactions in a 52% increase from the 2006 total, based on a new report. According to Jones Lang LaSalle Hotels (JLLH), global hotel deal activity through June already equaled $56 billion (which was higher than JLLH had predicted). Arthur de Haast, global CEO of JLLH, says that much of this activity is U.S.-based as listed hotel companies have been privatized in recent months.
“However, there are fewer opportunities for deals on this scale so attention may turn to other regions such as Europe where private equity firms could still find value in buying large hotel businesses,” says de Haast.
“Our survey results demonstrate that global yields are still tightening although investors’ expectations for leveraged IRRs have increased slightly as interest rates continue to rise,” adds de Haast.
Other findings from the August 6 report:
*On a global basis, hotel buyers outnumber sellers by almost 4:1
*Nearly one quarter of all survey respondents are mulling over new development opportunities