During the first half of 2024, hotel investment in Spain reached 1.3 billion euros and remains in line with the volumes recorded in the same period of the previous year, according to the report “Hotel Investment in Spain” released by Colliers. In this period, a total of 8,350 rooms were transacted in 71 operations. 53% of the invested volume has been allocated to the urban segment, breaking with the trend of the last 5 years, in which the vacation segment was dominant.
The Luxury segment continues to boom
Luxury is strong in terms of investment. During the first half of 2024, one in three euros invested in hotels in Spain has been allocated to the Luxury segment. 5* and 5* GL hotels have represented 33% of the investment, with a volume of €460M. The most representative deal in this segment was the acquisition of the Six Senses Ibiza (5*GL - 116 rooms) by the Italian investor, Gruppo Statuto, which broke all price records in Spain by exceeding 1.5 million euros per room.
Distribution of hotel investment by categories. 1st half 2024 (%)
The Balearic Islands and, in particular, Ibiza lead the scene
In this first half of the year, the Balearic Islands have led the investment with 30% of the total. 12 transactions have been registered in the Islands for a total volume of 415 million euros. This year, the contribution of Ibiza stands out, specifically the northern area of Portinatx, where two hotels have been transacted. The most outstanding operation is the acquisition of the Six Senses Ibiza hotel by Gruppo Statuto and the acquisition of the Hotel Presidente (3* - 270 rooms) by Meridia Capital, for its complete repositioning, which will involve a total disbursement of 70 million euros and in which Colliers has been an advisor from the seller's side.
Barcelona ranks second in terms of transaction volume, with a total of 13 deals and 300 million euros. The purchase by the Socimi Atom of a portfolio of two 5*GL hotels stands out: the Hotel Miramar and the Gran Hotel la Florida, which together have 145 rooms and were acquired for 50 million euros (€344,000/room). Both hotels will be renovated to adapt to the brand standards of the new managers, Hyatt and Sunset Hospitality, respectively. Madrid continues to suffer from a shortage of product available for sale, which has been reflected in a reduction in investment to 8 operations. The most outstanding of the first semester was the purchase on Gran Vía of the Hotel Mayorazgo (4 - 200 rooms) by the domestic hotel group Grupotel.
In the urban segment, operations that have taken place in province capitals such as Málaga stand out, with 5 transactions and c. 100 million euros, the most remarkable being the sale by ASG of the Hotel Palacio de Solecio (4*-118 rooms) for 51 million euros. In Granada, 3 transactions were recorded for a volume close to 30 million euros. In Alicante, the Eurostars Lucentum (4* - 169 rooms) was sold for €29.9M; in Seville, Extendam acquired the Hilton Garden Inn (4* - 140 rooms) and in Las Palmas de Gran Canaria, the Lopesán chain acquired the Hotel AC Iberia (4* - 281 rooms), in a deal advised by Colliers.
Portfolio transactions, in decline
Another feature that differentiates this 2024 is the lower number and relevance of portfolio transactions, with only 21% of the total volume corresponding to asset portfolios, compared to 62% last year. The two most relevant transactions were Atom's operation on the Miramar and Florida hotels in Barcelona and the acquisition by Moon GC&P, a vehicle owned by Banco Santander, of a minority stake of 38.2% in a portfolio of three 5* hotels owned by the Meliá chain in an operation valued at 300 million euros.
Notable change in the buyer profile, domestic investor shines
The profile of buyers in 2024 has differed significantly from previous years. If in recent years international investors, especially Private Equity, focused on value-add operations, this year the operations carried out by national investors of various types stand out: hotel groups, family offices, private investors, investment funds and Socimis (Spanish REIT), which in total have concentrated 57% of the investment.
Market Outlook
Positive short and medium-term prospects will continue to benefit investments in the hotel sector. "In 2024, hotel groups and family offices have provided liquidity to an industry in which the most usual investors, pension funds and Private Equity investors, were much more cautious in a context of rapid interest rate hikes and maintenance of tough conditions for a longer period than expected," comments Gonzalo Gutiérrez, Managing Director of Hotels at Colliers Spain.
“The pipeline of ongoing transactions amounts to €1.5 billion, which makes us optimistic about the second half of 2024. Although no major portfolio operations are in sight, such as those carried out by ADIA and GIC last year, we believe that the dynamics of smaller volume operations will continue and will allow us to reach normalized levels of €3 billion," concludes Gonzalo Gutiérrez.
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