Mallorca business: Foreign buying recovering after the pandemic

Hotels have long been a magnet for foreign investors. | Archive

Andrew Ede Palma 26/05/2022 16:19

A presentation in Palma on Thursday pointed to the reactivation of foreign investment in Spain. Having slowed dramatically in 2020 because of the pandemic, there was recovery in 2021, so much so that in one sector - hotels - the level of investment was 26% greater than in 2019.

Carlos Martínez and David Roldán of ONEtoONE Corporate Finance, a Madrid-based consultancy that specialises in mergers and acquisitions, indicated that there was total investment in the hotel sector in 2021 of 3,180 million euros - 127 transactions involving over 22,000 rooms. Of this, 58% was foreign investment (1,848 million euros). It is anticipated that this investment will increase over the course of 2022.

Noting that the investment is not confined to hotels and real estate, they pointed out that some 65% of investment in the Balearics last year was foreign.

Martínez observed that the Balearics suffered a great deal because of the paralysis of tourism activity. This led to purchases of businesses decreasing by 50%. 2022 is expected to be a year of definitive recovery. There could even be record figures, as investor demand grows at the same time as tourism and economic activity recovers. There is also likely to be greater supply, as it is felt that now is a good time to sell.