Investors Check Into Hotel Sector
HOTEL SALES WORLD-WIDE ARE ON A SCORCHING PACE AFTER TOTALING $42 BILLION IN THE FIRST HALF
Hotel sales world-wide are on a scorching pace for 2015 after totaling $42 billion in the first half, boosted by an increasing appetite among Asian and Middle Eastern investors.
Lodging transactions in the first half jumped 56% over the same period last year, according to real-estate broker JLL’s Hotels & Hospitality Group. The pace was short of the record of $62 billion set in the first half of 2007.
The surge in hotel activity this year reflects investors willing to take on more risk in search of higher yields at a time when interest rates remain near historic lows. Hotels typically generate higher returns than traditional real-estate assets like offices or retail space.
“Institutions are getting more comfortable acquiring hotels, and the hotel market is benefiting from that,” said Mark Wynne Smith, chief executive officer at JLL Hotels & Hospitality.
The sales also were driven in part by a number of sovereign-wealth funds and corporate investors entering the hotel market for the first time or increasing their exposure.
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