News for the Hospitality Executive
LONDON, July 13, 2011-- Jones Lang LaSalle Hotels today released its second quarter statistical analysis of the global hotel investment market, which reveals that $14.8 billion (1) in hotel assets changed hands in the first six months of 2011. Compared with the same period last year, this represents a 117 percent 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.
The Americas registered a compelling 187 percent 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 (2) in hotel transactions took place in Europe, Middle East and Africa (EMEA) in the first half of 2011, marking an 84 percent (3) 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 percent increase on the prior-year period.
"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 percent year-on-year increase."
"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.
"Hotel sales in the Americas are anticipated to total $16 billion, up from our previous forecast of $13.1 billion for full-year 2011 based on the pace recorded so far, and large pending transactions including Chatham Lodging Trust and Cerberus Capital Management, L.P.'s acquisition of 64 assets for approximately $1.13 billion," said Adler.
"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. "Singapore dominated transaction activity in the first half of 2011 with volumes surpassing $1 billion, reflecting pent up investor demand for the market," said Scott Hetherington, CEO-Asia for Jones Lang LaSalle Hotels. "We forecasted volumes to total $2.75 billion in Asia earlier this year and we expect this figure to remain unchanged as growth in countries like Singapore and Thailand is expected to offset decelerated activity in Japan as a result of the March 2011 earthquake," said Hetherington.
In Australasia, deal volume totalled $478 million with offshore capital sources featuring strongly in the country, accounting for 76 percent of transaction volumes. "We expect transaction volumes to reach $1 billion in Australasia by year-end 2011, which is up from our previous forecast of $800 million with cross border investment expected to continue," said Craig Collins, CEO-Australasia for Jones Lang LaSalle Hotels.
Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide the depth and breadth of advice required by hotel investor and operator clients, through a robust and integrated local network. In 2010, Jones Lang LaSalle Hotels provided sale, purchase and financing advice on $4.1 billion worth of transactions globally. In addition, advisory and valuation services were provided on over 1,000 assignments. The global team comprises over 225 hotel specialists, operating from 39 offices in 20 countries. The firm's advice is supported by a dedicated global research team, which produced 70 publications in 2010 in addition to client research. Jones Lang LaSalle Hotels' services span the hospitality spectrum; from luxury single assets and large portfolios to select service and budget hotels, resorts and pubs. Services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator selection, management contract negotiation, consulting, industry research and project development services. Jones Lang LaSalle Hotels' clients have access to the resources of its parent company, Jones Lang LaSalle (NYSE: JLL). www.joneslanglasallehotels.com
(1) Figures include hotel property transactions $10 million and above in the Americas and EMEA, $5 million and above in Asia Pacific and excludes note sales, land sales, foreclosures and recapitalizations
(2) Euro 3.37 billion H1'11 vs. euro 1.93 billion H1'10
(3) Representing a 73% year-on-year increase in euro terms as a result of currency movements. Jones Lang LaSalle records hotel transactions at the date of closing, using daily exchange rates
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