Spain-based hotel investments have gained prominence globally, with Europe at the forefront. In the January to August 2023 window, hotel assets in Spain drew a substantial share of European investment, including a notable 2 billion euros transferred in high-value deals. EY’s Hotel Property Telescope highlights that total European investment in hotels exceeded 7 billion euros in this period, underscoring Spain’s pivotal role in the regional market.
Spain’s footprint in the European hotel sector has reached its strongest level in years. The year 2023 so far shows investments in Spain accounting for 29% of Europe’s total, a share that mirrors the proportion recorded in 2022 and marked growth from 2021 and earlier years. Within Spain, hotel investments represented 42% of all registered deals between January and August 2023. In this stretch, hotel activity reached 2,000 million euros, surpassing investment levels in offices, commercial properties, logistics, and other assets. EY notes a pipeline value of around 2.043 billion euros for assets that may be traded in the medium term.
Despite this active pipeline, hotel investments in 2023 were about 22% below the 2022 figure. Still, the year stood out as the third strongest in the long-running series, trailing only 2017 and 2018. The dip in overall volumes—around 50% in the first half of the year—aligns with a broader environment marked by central bank rate hikes that affected asset valuations as markets adjusted.
Arab capital has emerged as a leading force in Spain, driving a notable share of the activity this year. In the first eight months of 2023, Arab investors accounted for a sizable portion of the deals, including three of the four largest investments and more than half of total volume. Historically, this investor group hovered between 0% and 20%, but in 2022 their presence grew toward 40%. The Abu Dhabi sovereign wealth fund, ADIA, led the charge with two major moves.
The first involved a broad portfolio purchase of 17 hotel properties totaling 2,600 rooms for about 600 million euros, acquired by Equity Inmuebles, the holding company controlled by the Calero, Briones, and Mazin families, founders of the Tryp chain. This deal ranked as the second-largest European operation in 2023, surpassed only by a 650 million euro acquisition by Dubai Holding, associated with Sheikh Mohammed bin Rashid al-Maktoum, for The Westin Paris Vendôme.
ADIA’s second move was the acquisition of a 51% stake in Calviá Beach Project, located in Magaluf, Mallorca. The fund paid 110 million euros for seven hotels that will continue under Meliá management, while remaining 49% owned by Meliá and transferred to Avenue Capital, an American opportunistic fund. The properties include the Meliá South Beach, Sol House The Studio-Calviá Beach, Sol Barbados, Sol Wave House all Suites, Meliá Calviá Beach, Sol Guadalupe, and Innside by Meliá Calviá Beach.
Another major transaction where Arab capital played a central role involved Mandarin Oriental Hotel Barcelona. The Olayan Group, linked to a prominent Saudi family’s investment arm, partnered with Farallon, an American fund, in a 200 million euro deal that acquired assets from the Reig family and the Andorra group via CaixaBank in 2020. The sale priced at a record per-room valuation of 1.66 million euros for each of the hotel’s 120 rooms.
This period also featured one of the year’s most notable trades not led by the eastern capital, with Sofia Hotel in Barcelona changing hands as Brookfield AM sold its stake to Sofia Hotel’s investment arm through Blasson Property Investments for around 180 million euros. Other significant moves included a portfolio of three Balearic Island complexes purchased by Starwood from Banca March for 110 million, Hotel W Ibiza being acquired by Scala Capital from Italian fund Statuto for 97 million, and the transfer of two hotels or complexes owned by Globalia to Stoneweg, a Spanish-Swiss management group, for 83 million. Marina D’Or was acquired by Grupo Fuertes, a Murcian company also known for El Pozo, for approximately 63 million dollars.