30-06-2011Sergio G. Canizares

According to the CBRE commercial property and real estate adviser, the strong performance of Spanish holiday destinations is attracting significant interest among investors looking to acquire hotels, and the Balearics is one of the main targets of this interest.

The purchase of seven Sol hotels within the Meliá group by the American fund Starwood Capital earlier this year has acted as a template for investment joint ventures. Two of these were in Palmanova and there were two more in Ibiza. By July the level of investment in the Spanish hotel sector was 1,100 million euros, up by 63% over 2014 and at a record level since economic crisis started in 2008. The final tally for 2015 is expected to be over 1,600 million, the value in 2006 that was then a record.

Investors from the Middle East and Asia are proving to be very active. They are seeking trophy assets such as the Ritz in Madrid, which has been acquired through the joint venture between Mandarin Oriental and the Saudi Olayan Group. Another is the Hotel Asturias, bought by the Hong Kong-based Platinum Estates and which is to be transformed into a landmark hotel in Madrid.

The interest, especially for five-star, luxury hotels, is also leading to investors to seek residential and office properties that can be transformed into hotels.

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