Hotel Investment in Spain Reaches €1.393 Billion

Discover how hotel investment in Spain totals €1.393 billion by June 2024, highlighting trends and opportunities in the hospitality sector.

In the first half of the year, hotel investment in Spain reached a staggering €1.393 billion, mirroring the figures from the same period in 2023, as detailed in the latest Hotel Investment in Spain report by Colliers. A total of 8,350 rooms changed hands across 71 transactions, with a notable 53% of the investment volume directed towards the urban segment, marking a departure from the trends observed over the past five years.

The luxury segment also made waves, with five-star and five-star grand luxe hotels (GL) accounting for 33% of the total investment, translating to a hefty €460 million. The crown jewel of this segment was undoubtedly the acquisition of the Six Senses Ibiza by the Italian investment firm Gruppo Statuto, which set a new benchmark in Spain by surpassing €1.5 million per room—a price that could make even the most seasoned investors raise an eyebrow.

Geographically, the Balearic Islands emerged as the frontrunner in hotel investments, capturing 30% of the total with 12 transactions amounting to €415 million. Ibiza, particularly the picturesque northern area of Portinatx, shone brightly this year, with the aforementioned Six Senses acquisition stealing the spotlight. Following closely was Barcelona, which recorded 13 transactions totaling €300 million. Noteworthy was the purchase by Atom, a Spanish Real Estate Investment Trust (SOCIMI), of two five-star grand luxe hotels: the Hotel Miramar and the Gran Hotel La Florida, with a combined acquisition of 145 rooms for €50 million. Both establishments are set for refurbishment to align with the brand standards of their new operators, Hyatt and Sunset Hospitality, respectively.

However, not all regions shared in this investment bonanza. Madrid continues to grapple with a dearth of available properties for sale, resulting in a mere eight transactions. The most significant of these was the purchase of the Hotel Mayorazgo in Gran Vía by the Mallorcan hotel group Grupotel. In the urban market, notable transactions unfolded in provincial capitals such as Malaga, which saw five deals totaling €100 million, while Granada recorded three transactions nearing €30 million. In Alicante, the Eurostars Lucentum was sold for €29.9 million, and in Seville, Extendam acquired the Hilton Garden Inn. Meanwhile, in Las Palmas, Gran Canaria, the Lopesán chain secured the Hotel AC Iberia, with Colliers providing advisory services.

Looking ahead to 2024, Gonzalo Gutiérrez, the managing director of Hotels at Colliers, anticipates that hotel investment in Spain will stabilize at a more typical level of €3 billion. However, he notes the absence of major portfolio transactions on the horizon, akin to those executed by ADIA and GIC in the previous year.

A noteworthy trend for 2024 is the decline in both the number and significance of portfolio transactions, which now account for only 21% of the total volume, a stark contrast to the 62% seen last year. The most prominent deals included Atom's acquisition of the Miramar and Florida hotels in Barcelona, alongside Moon GC&P's purchase of a 38.2% minority stake in a portfolio of three five-star hotels owned by Meliá, valued at €300 million.

The buyer profile for 2024 has also shifted considerably from previous years. While international investors, particularly private equity firms, have historically dominated the value-added transaction landscape, this year has seen a rise in activity from national investors of various stripes—hotel groups, family offices, private investors, investment funds, and SOCIMIs now represent a robust 57% of the investment landscape. It seems that the local players are stepping up to the plate, ready to make their mark in the ever-evolving hotel investment arena.