EMEA zone sees increasing assets in administration

Jones Lang LaSalle Hotels released its second quarter statistical analysis of the global hotel investment market, which revealed that US $14.8 billion in hotel assets changed hands in the first six months of 2011.

Compared with the same period last year, this represented a 117% increase, which according to Jones Lang LaSalle Hotels is driven by the easing levels of liquidity, improved hotel trading performance and banks’ actions to speed up workout programs.

“Despite various natural, economic and political crises witnessed globally in the first few months of 2011, hotel transactions continued gaining momentum and volumes for the full year are expected to exceed our previous forecast,” said Arthur de Haast, global CEO for Jones Lang LaSalle Hotels.

“We now anticipate full-year numbers to reach $34.8 billion globally, marking a 28% year-on-year increase.”

The Americas registered a 187% year-on-year upsurge with transaction volumes totalling $7.4 billion, driven by large single-asset deals in gateway cities like New York. A total of $4.7 billion in hotel transactions took place in Europe, Middle East and Africa (EMEA) in the first half of 2011, marking an 84% increase on the same period last year.

Activity accelerated as a result of a marked increase in the number of assets going into administration. In Asia Pacific, deal volume totalled $2.6 billion, a 59% increase on the prior-year period.

“REITs continued as the most acquisitive buyers in the Americas although private equity investors, who were on the sidelines during the downturn, made a strong comeback to the market in the first half of 2011,” said Arthur Adler, CEO-Americas of Jones Lang LaSalle Hotels.

A recent notable deal includes Morgans Hotel Group selling the 168-room Royalton and 114-room Morgans Hotels in New York to FelCor Lodging Trust for $140 million.

“As expected, a marked increase in the number of assets going into administration with lenders increasing the speed of their workout programmes is characterising current EMEA deal activity,” said Mark Wynne Smith, CEO-EMEA of Jones Lang LaSalle Hotels. In the beginning of June, RBS took control of a portfolio of 42 Marriott hotels in the UK and Von Essen Hotels had already been put into administration earlier in April by Lloyds Banking Group and Barclays.

“We expect hotel investment volumes across EMEA to rise to $15.1 billion, a $2 billion increase on our previous forecast, as significant product is expected to come to market in the second half of 2011,” added Wynne Smith.

Activity in Asia Pacific totalled $2.6 billion with the main action taking place in Singapore, Australia, China, Japan and Hong Kong.

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