London, 14th January 2002 � Europe�s hotel investment markets saw a flurry of investment activity in the last part of 2001.  December saw investment volumes of €344.3 million, a 37% rise over the same month in 2000 � itself a record year.  Jones Lang LaSalle Hotels closed four deals in the month of December.

�The final quarter of the year saw transaction volumes hit €746 million, representing 56.0% of total volume across Europe in 2001, showing a strong run at the end of the year despite September 11th and its repercussions� stated Nick Marsh, Executive Vice President at Jones Lang LaSalle Hotels.  
 

Jones Lang LaSalle Hotels acted as advisor to the owners of the five-star Hotel Arts Barcelona which was sold to Deutsche Bank AG�s Private Equity Group in December and represented Europe�s largest hotel transaction of the year at €285 million.  �This deal was a watershed for the European hotel sector, demonstrating that investor interest for quality assets in city centres is robust� stated Mr Marsh who concluded the deal.

The 44-story Hotel Arts Barcelona

Another deal concluded by Jones Lang LaSalle Hotels in December was a 300-room hotel development at Charles de Gaulle Airport in Paris, which was bought by the German open-ended fund, Commerz Grundbesitz Investmentgesellschaft mbH (CGI), for €37.5 million.  �The German funds have a healthy appetite for hotel assets to act as a diversifier to their real estate portfolios.  The funds have been witnessing substantial cash in-flows in Germany as a result of the poor stock market performance, they have a low cost of capital and are thus very competitive in the sector� stated Christoph Härle, Director, Germany, at Jones Lang LaSalle Hotels. He added �This deal reinforces the cross-border investment strategy that many of the open-ended funds are currently pursuing�.  According to research conducted by Jones Lang LaSalle Hotels, German funds had €11.77 billion of cash to invest into European real estate as at October 2001. 

Following the attacks of September 11th and the ensuing dip in global travel patterns, many of Europe�s hotel markets suffered a slump in trading.  �While there is a widespread belief that the softening trading conditions have caused markets to stagnate, this is evidently not the case� stated Mr Marsh.  �There still remains strong investor interest for prime, city-centre hotel assets both in the UK and on the Continent.  Buyers in the market include the German funds (as evidenced by these recent deals), some of the large hotel operators who have high cash reserves, and long term investors who are not going to make an investment decision based on the next six months trading performance.  On top of this, banks in Europe are still adopting a relatively open stance to the hotel sector, unlike their US counterparts, evidenced by The Royal Bank of Scotland providing financing on the Hotel Arts deal� added Mr Marsh.

A number of additional deals have taken place in Europe since September 11th.  These include the Berners Hotel in London (216 rooms, €81.4 million), Heathrow Park Hotel, London (310 rooms, €21.3 million), Radisson SAS Manchester (360 rooms, €60 million), the Holiday Inn Bonn (252 rooms, €25 million), the Villa Magna in Madrid (182 rooms, €80 million), Maritime Pro Arte, Berlin (406 rooms), the Ritz-Carlton Schlosshotel Berlin (541 rooms) and the Parkhotel, Bremen (149 rooms).

In contrast to the level of activity in Europe, less than 15% of hotel transactions in the US occurred in the final quarter of 2001, down nearly 50% on 2000. Notable transactions included the Hotel Delmonico in New York (170 rooms, €129 million), the La Costa Resort and Spa, California (479 rooms, €140 million), and the Marriot City Centre in Pittsburg (383 rooms, €72.9 million). However, the Asia Pacific region also finished strongly, recording half of total 2001 transaction activity in the final three months, heavily influenced by the sale of the Hyatt Regency Sanctuary Cove complex in Australia (247 rooms, €116 million).