NEW figures show investments in Spain’s hotel sector reached a record high in 2018.
Reflecting the general trend for growth in the property market and economy, the hotels industry received 23.1 per cent more investment last year than in 2017.
Data compiled by the Colliers International Firm showed hotels received a total of €4,810 million in 2018, although experts warned growth in 2019 is expected to be more moderate.
Spain’s overall economy continues to expand at a rate of more than 2 per cent per year, and is expected to continue at the same pace until 2021. The trend is in contrast to other countries, including Germany, France, and Italy, and gives Spain the best GDP growth forecast of all the major European economies.
As well as boosts to the GDP, Spain’s consumer confidence has also improved, while unemployment is also down, as the national deficit has fallen. Colliers International Firm claim one of the major factors driving improvements in Spain’s economy is tourism. Investment also continues to be a strong sector thanks to low interest rates.
Last year’s large rise in hotel investment made Spain the second most popular investment destination in Europe after the United Kingdom.
For the first time ever, record highs have meant Spain beat Germany for investment.
A breakdown of the figures shows €4,590 million of the total €4,810 million came from the sale of existing hotels, whereas €152 million was from the sale of real estate which will be converted into hotels. A further €68 million was spent on land for building hotels.
Of last year’s investments, one of the largest was the purchase of 97.91 per cent of the Hispania real estate group by American asset management company Blackstone.
This transaction saw 49 of the hotels own by Hispania sold to the major company.
Similarly, 94.14 per cent of the NH Hotel Group was bought by Minor Hotel in a €400 million deal involving the sale of 11 hotels.
One Madrid hotel, the Hotel Villa Magna, also accounted for a large portion of hotel sales last year, being purchased by RLH Properties for €210 million.
Spain’s capital proved to be a popular choice for investors, with the bulk of sales taking place in Madrid, as well as the Canary Islands, and Balearics.
Hotel investment reached a total of €632 million in Madrid in 2018, a similar figure to the previous year.