HE hotel industryFrom the investment segment, it closed its field of activity Second best year of the historical serieswith volume Investment of 4.1 billion eurosIt was just behind 2018, when 5,000 million was reached, according to data published a week ago by consulting firm CBRE. This figure represents 40% to 45% of investments in the real estate sector last year, in an unusual year compared to 2022.
2023 has been a challenging year for real estate investment due to the rise in interest rates and the adjustment in asset values. Although the figures from consultancy firms are not exact, the total expenditures made by investors 9 billion eurosalmost half the previous year. However, this has been little noticed (or not noticed at all) in the hotel industry, which has become the ‘El Dorado’ of international funds.
“2023 has been a historic year in terms of hotel investment. It has become the first type of asset in our country that can become the main hotel investment destination in Europe, ahead of even the UK, France and Germany.” Laura HernandoDirector of Hotels at consultancy firm Colliers.
High investment volume generated by few people operations carried out by institutional funds. The most significant of these was the acquisition by Singapore sovereign fund GIC of 35% of HIP, which is the largest hotel owner in Spain and also owns assets in Portugal and Italy. This transaction alone accounted for almost a third of the total recorded for the year. Another sovereign fund, in this case Abu Dhabi ADIA, has completed two significant acquisitions: it paid 600 million euros for 17 hotels spread across Spain, and it also paid approximately 51% of Proyecto Calviá Beach, a hotel complex in Majorca. He paid 250 million euros.
“Institutional investors and sovereign funds represented around 50% of all investment volume, to the relief of private equity funds, which accounted for only 11%,” he notes. Enrique Losantos, CEO of JLL. Laura Hernando explains why, beyond the fact that they are capitals that are not overly affected by the increase in financing costs: “The good performance of hotels and the positive forecasts regarding the behavior of tourist demand in the short and medium term will continue. It will undoubtedly attract liquidity to the sector in 2024. In addition, the pandemic is important for investors and operators of holiday hotels It strengthened the perception of being a being.
Offices and commercial assets, vice versa
In stark contrast to hotels is another type of asset that has traditionally been a major focus of real estate investors. Offices And business assetsespecially centres. The rise of electronic commerce on the one hand, and more recently remote working on the other, has eliminated the appetite for acquiring these properties off the market.
in 2023 office investment was around 1,000 million eurosAlmost half of the previous year, in line with what is happening across the market. Institutional investors and private equity funds (private equity) has virtually disappeared in a market where the main actors are private investors. “There has been an increase in investments in the middle market and an increased appetite for domestic capital trying to benefit from the current low liquidity,” he commented. Adolfo Ramírez-EscuderoHead of CBRE in Spain and Latin America. According to Savills, the contract for such areas was around half a million square meters in the capital and 230 thousand square meters in Barcelona.
In the case of retailThe investment, which is an initiative that brings together all kinds of commercial assets such as stores, supermarkets or shopping malls and parks, closed the year 2023 at around 1,200 million. The decline is larger, but the closure of a major $2 billion operation in 2022 changes the comparison. Compared to what’s happening in offices now, retail was severely penalized even before the pandemic, and this could be the catalyst for a rapid recovery. “The asset type with the highest growth potential for 2024. “Not only are the fundamentals, occupancy levels and rents good, but there are also advanced negotiation processes for the sale of significant volumes of portfolios and shopping centres,” he explains. Borja OrtegaCEO of BNP Paribas Real Estate.
Logistics, solvent demand, but price correction
The state of the logistics market lies somewhere between markets that are having the worst time, such as offices, and markets that are doing better, such as the residential sector. On the one hand, the sector grew in 2021 and 2022 thanks to the rise of electronic commerce and the pandemic: Companies increasingly demanded more warehouse space, and investors wanted to include such assets in their portfolios. This caused yields to fall rapidly and property prices to rise. With the change in monetary policy returns and shipping values correctedHowever square meter demand remained almost the sameSo much so that in regions like Catalonia there are almost no people for rent.
According to Catella data, until the third quarter, Investment dropped by nearly 70% compared to 2022up to 675 million euros. Regarding rentals, a historic figure was recorded in 2023, according to Catella CEO Carlos López. “Looking ahead to 2024, demand is predicted to remain at similar levels to those recorded in 2023,” Borja adds. Ortega: According to Savills figures, approximately 950,000 square meters are being recruited in Madrid and 550,000 square meters in Barcelona.
Another trend in current logistics is that investors are starting to move away from big cities. “In 2023 Investment moved from Madrid and BarcelonaHE They own 70% of the capital“says Cushman Wakefield CEO Oriol Barrachina. “There are new players interested in entering the market. “When we look at 2024, the outlook is optimistic,” he confirms. Oriol Gual, Colliers Industrial and Logistics Director. “We expect volumes of over 1.2 billion next year,” Savills CEO Jaime Pascual-Sanchiz confirmed.
Housing and alternative favorites
In addition to hotels, all housing-related segments are among the favorite assets of investors: from rental housing to more innovative formulas such as social living. According to Savills’ data, Residential rentals increased to approximately 2 billion 600 million Euros in 2023 and the forecast for 2024 is higher. “The imbalance between supply and demand in the Spanish market continues to increase rental demand and investors’ appetite for this product and even the land to develop it,” comments Enrique Losantos.
HE affordable rental housing It also took its place in the market. Adolfo Ramírez-Escudero notes: “There is interest. 41% of the investment between January and September was in such properties.” Additionally, housing alternatives such as flexible living, care homes or student housing, among other alternative segments, attracted around 600 million people in 2023, according to Savills; This figure will double in 2024.
Exactly among these alternatives data centers (data centers) It is one of the most interesting typologies. “The market was unaware of the general market conditions. After the ‘boom’ in 2021 and 2022, 2023 has been a year of consolidation for the sector, with the main actors being established operators who are implementing growth plans. José María Gillaume, director of Colliers Data Centers, said that 2024 will be a year for the business He says there will be a period of opportunities where asset transactions will gain market share compared to land transactions.