Figures for Q1 2014 Show 155% Hike in London Hotel Investment Market According to Jones Lang LaSalle
May 19, 2014 6:10am
May 19, 2014 - Q1 hotel investment figures released by JLL show a 155 per cent increase in the London hotel investment market in Q1 2014 compared to Q1 last year and a 33 per cent rise in Asian investment into the capital’s hotel market compared to Q4 2013, with private equity firms making up over a quarter of the investment total.
Total investment in the London market for this quarter stood at £527.8 million, up by 8 per cent from Q4 2013 and 155 per cent from Q1 2013 when it stood at £207.2m.
The largest source of investment in Q1 and Q4 came from the UK domestic market, although the percentage fell by 39 per cent from Q4. The highest jump in terms of source of investment money came from Asian buyers, rising from 0 per cent to 33 per cent between two quarters. There was also a 5 per cent increase from Middle Eastern markets.
Drivers of Asian investment include an increase in Chinese property developers ploughing money into real estate projects following a relaxation of restrictions imposed by its government on Chinese companies investing overseas, as well as a broadening of the types of funding allowed.
In terms of investor type, private equity, investment funds and sovereign wealth funds had the largest share of the investment market in Q4. Private equity and investment funds have remained dominant between the quarters, although with a reduction in market share of 43 per cent. Sovereign Wealth funds made up 28.4 per cent of Q1 investment this year, compared to 0 per cent last quarter.
George Nicholas, Executive Vice President in JLL’s Hotels & Hospitality group commented: “Investors are increasingly seeing the UK, and London in particular, as a top prospect for investment activity. Q1 figures bear this out and it is interesting to see the rise in Asian investment. London is appealing for the maturity of its market, its trophy assets and the post-Olympic boom and low cap rates. We expect to see more high net worth individuals and sovereign wealth funds targeting acquisition of trophy assets in London, an example of which was the recent purchase of the London Marriott Grosvenor Square by Hong Kong based fund Joint Treasure, where JLL acted for the vendor, Strategic Hotels & Resorts.
"The key driver of increased Chinese and Hong King interest in to the UK is the slowing of the Chinese economy of its previous highs, and the restoring of confidence in the European capital markets. Intelligent capital always anticipates and chases the next cycle and it's no surprise to see Asian and Middle Eastern capital being assessed to the base of domestic funds deployed in the lodging sector in the UK."
Tags: jones lang lasalle,
For more news, videos and research from Jones Lang LaSalle's Hotels & Hospitality Group, please visit: www.jll.com/hospitality or download the Hotels & Hospitality Group's app from the App Store
How Technology is Turning Buildings into Butlers
Hollywood Stars Heading Backstage in the Hotel Sector
Is There Still Room for the Buccaneer Property Developer?
What's Next for Hotel Investment in Brazil?
Four Key China-Related Trends Shaping Asia Pacific Hotel Industry
Asia Pacific First-Half Hotel Transaction Volume Rises 13.2 Percent
Why Timing is Everything for Convention Center Hotels
Serviced Apartments: The Rising Star of the Hospitality Sector?
Data Center Outages: Why Humans Can be a Building’s Biggest Hazard
JLL: London's Economy Hotel Segment Sees Significant Growth
U.S. Hotels Make Chinese Travelers Feel at Home
When Less is More in Hotel Design
How Business Travel is Driving Asia’s Serviced Apartment Boom
Hotels Check in to Greener Thinking
The Hotel Industry - From the Humble Inn to a Multi-Billion Dollar Business
Hotels up Their Game for Fitness Conscious Guests
Can Mobile Apps Make for Happy Hotel Guests?
‘New World Cities’ Taking Centre Stage in Global Real Estate Investment Market
Robust Growth in Global Hotel Investment According to JLL’s Global Market Perspective Q1 2016
JLL Reports Sydney's CBD and Metropolitan Hotel Markets Experienced Record Year
Please login or register to post a comment.