News for the Hospitality Executive
CHICAGO, Jan. 9, 2013 -- Jones Lang LaSalle's Hotels and Hospitality experts expect worldwide hotel deal volume to reach $32 billion in 2013, as increased transparency around the world gives way to a more globalized arena for investors. As the investment landscape continues to transform, a strong bench of buyer groups will remain interested in acquiring assets, according to initial results from Jones Lang LaSalle 's annual Hotel Investment Outlook report, to be released in late January. Cross-border capital, which accounted for 30 percent of global hotel investment in 2012, could also accelerate in 2013.
Previous economic cycles have provided few clues as to what lies ahead for hotels in the coming year, as new indicators of a coupled global economy define investment roadmaps:
"Inadvertent hotel owners, like banks and receivers, will continue to drive a significant share of hotel product to market. We also expect institutional investors to liquidate select non-core assets that will create opportunities for value-add investors," said Mark Wynne-Smith , Global CEO of Jones Lang LaSalle 's Hotels & Hospitality Group. "While buyers have indicated a greater intent to purchase in 2013, the global economic uncertainty will keep a ceiling on transaction volumes."
Of the active players, private equity investors will continue to lead the pack, being in the favorable position of achieving opportunistic returns through their significant buying power and risk tolerance. REITs, net buyers throughout 2012, will continue to make headline acquisitions of core properties in gateway markets. This is particularly true in North America and Asia Pacific where two new hotel REITs in Singapore have been listed. Funds from the Middle East will continue to scour the globe for trophy assets looking for opportunities to export capital in 2013.
Debt: progress and growth, or stagnation?
The global availability of debt is expected to be at the highest level in 2013 since 2007, notwithstanding regional variances. Large banks, traditionally key providers of real estate debt financing, don't have sufficient balance sheet capacity to lend significant sources of new money. Sovereign wealth funds, mutual funds and insurance companies, however, will fill the gap as providers of senior and in some instances mezzanine debt.
Hotel operating fundamentals reassure outlook
Hotel operating fundamentals are generally holding strong, and in some cases are outperforming expectations, given the economic pressures. At the forefront of growth in revenue per available room (RevPAR) in 2013 are the world's gateway and resource-rich cities, which underscore the attractiveness high-quality, income-producing hotel real estate provides as an asset class. Global travellers will boost demand and average room rates in markets such as Istanbul, Munich, San Francisco, Boston, Sydney and Singapore, which have already enticed investor interest and will be the markets to watch in 2013.
A long road ahead
Transaction levels, capital values, hotel trading fundamentals and rents are generally improving against a backdrop of downward revisions to economic growth. However, given the amount of stimulus that continues to be injected into the world economy, economic growth rates in the coming years are expected to slowly improve.
"Investment strategies moving forward will be more structural and strategic than cyclical, impacting what we've always deemed as the 'typical' ebb and flow of the transaction market," concluded David Green-Morgan , Global Capital Markets Research Director for Jones Lang LaSalle . "Flexible investors and operators who can calculate risk and adapt the quickest will be the most successful next year."
Jones Lang LaSalle 's Hotels & Hospitality Group's annual Hotel Investment Outlook report will be broadly released in January 2013. To request a copy of the full report, please subscribe here.
Jones Lang LaSalle 's Hotels & Hospitality Group serves as the hospitality industry's global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centers; mixed-use developments and other hospitality properties. The firm's more than 265 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world totaling nearly US$25 billion, while also completing approximately 4,000 advisory and valuation assignments. The group's hotels and hospitality specialists provide independent and expert advice to clients, backed by industry-leading research.
For more news, videos and research from Jones Lang LaSalle 's Hotels & Hospitality Group, please visit: www.jll.com/hospitality
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse in real estate with $47 billion of assets under management. For further information, please visit www.joneslanglasalle.com.
Jones Lang LaSalle 's Hotels & Hospitality Group
Lang LaSalle Hotels Latest European Hotel Investor Sentiment Survey
Indicates 40% of Respondents Intend to Buy Over Next Six Months /
for Quality Hotel Assets in Stockholm Continues into 2013 According to
Jones Lang LaSalle's Hotel Intelligence Report Sweden / December
Hotel Market is Holding its Own Despite the Country's Economic and
Financial Challenges According to Jones Lang LaSalle Hotels' Hotel
Intelligence Report / September 2012
European Hotel Markets Witness Positive Growth in Trading Performance
/ July 2012
in Global Real Estate Markets Increases, Aiding Investors and
Occupiers, According to Jones Lang LaSalle / June 2012
Outlook for Hotel Performance in Latin America, According to Jones Lang
LaSalle Hotels' Latin America Hotel Investor Sentiment Survey; Markets
in Brazil, Mexico, Colombia and Chile Rank Most Optimistic for
Investment Outlook / June 2012
Hotel Transaction Volume Reaches $5.1 Billion Thus Far in 2012;
According to Jones Lang LaSalle Hotels' Database Average Price Per Key
for Single-Asset Transactions Rises 5% on Full-Year 2011 Levels /
Investment Sentiment Strengthens in Europe Despite Uncertainty;
According to Survey Conducted by Jones Lang LaSalle Hotels 46% of
Cities Tracked Expected to Show Trading Performance Growth in next Six
Months / June 2012
Hotel 2011 Market One of the Best Performing in Europe; Warsaw Hotels
Posting 8.3% Appreciation in Room Yield Over 2010 According to Jones
Lang LaSalle Hotels Poland Hotel Intelligence Report / May 2012
of Branded Hotels’ International Expansion to Reach New Focus and
Intensity in 2012 According to Jones Lang LaSalle Hotels; While Brazil,
Russia, India and China Remain a Key Focus, New Target Countries
Include Indonesia, Malaysia, Nigeria, Turkey and Vietnam / May 2012
Hotel Investment Market During Q1 2012 Shows Strong Activity in London
and Paris; Overall EMEA Investment Volume 39 % Lower than Q1 2011
According to Jones Lang LaSalle Hotels / April 2012
Asset Deals Accounted for 60% of Total Hotel Investment Volumes in 2011
Across EMEA According to Jones Lang LaSalle Hotels' Hotel Investment
Highlights Report / March 2012
York City Sets Record with $3.5 Billion in Hotel Transactions in 2011,
a 150% Increase Over 2010; Jones Lang LaSalle Hotels Predicts New York
Deal Volume Will Continue to Lead U.S. Cities in 2012 / January 2012
Hotel Transaction Volume Forecasted to Hold Steady in 2012 with
Worldwide Levels to Once Again Reach $30 billion According to Jones
Lang LaSalle Hotels Annual Hotel Investment Outlook 2012 Report /
Wynne-Smith to Become CEO for Jones Lang LaSalle Hotels While Arthur de
Haast Steps Up to Chairman / December 2011
Hotel Investors’ Appetite to Buy Rises to 18-month High, According to
Jones Lang LaSalle Hotels Survey; Top five cities for acquisitions
include Stockholm, Copenhagen, Chicago, Milan and San Francisco /
Buying Audience Emerges as REITs Pull Back on the Throttle for Hotel
Assets; Jones Lang LaSalle Hotels says sellers' window is still open as
growth in hotel room rates are expected to outpace inflation /
Lang LaSalle Hotels Study, Lodging Industry in Numbers – Brazil 2011,
Reveals Double-Digit Performance Growth for Brazilian Hotels for Second
Consecutive Year / August 2011
Lang LaSalle Hotels Forecasts Global Hotel Investment Volumes to Reach
$34.8 billion in 2011; The Americas Registered a 187% Year-on-Year
Upsurge with Transactions Totalling $7.4 billion / July 2011
Hotel Transaction Volume Reaches $4.9 Billion Through May, Triple the
Volume for Same Period Last Year Reports Jones Lang LaSalle Hotels;
Investors' 'buy' intentions are at six-year high / June 2011
Lang LaSalle Hotels Reports $24.3 billion in Global Hotel Sales During
2010 as Investors Get Back in the Game; Expects Deal Volume to Rise up
Another 15-25% Across the Globe in 2011 / January 2011
the Financial Challenges of 2009, Jones Lang LaSalle Hotels Forecasts a
30 to 40 Percent Increase in Global Hotel Deals; Worldwide Transaction
Levels Could Reach $28 to $30 billion in 2011 / November 2010
Lang LaSalle Hotels Arranges the Sale of the Laguna Cliffs Marriott
Resort & Spa / October 2007
|Jones Lang LaSalle Hotels Select Service Division Closes Radisson Fort Worth North Hotel / January 2007|