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News Release

London, Moscow

EMEA Hotel Investment Volume 39% lower than Q1 2011


London - Moscow, 24 April 2012 - In the first quarter of 2012, hotel investment volumes in Europe, Middle East and Africa (EMEA) totalled €1.5 billion, a 39% decline compared to Q1 2011. However, volumes in Q1 2011 were distorted by approximately €1billion from three significant transactions (Marriott Champs Elysées, Ritz Carlton Moscow and a large Accor European portfolio), so stripping these out, volumes increased by 7% compared to the same period last year. Single asset deals accounted for 74% of transactions.

Investment activity remains strong in Paris and London with a combined investment total of €645 million in 14 deals and with continued trading, growth investor demand is expected to continue to be high.

Christoph Härle, CEO Continental Europe Jones Lang LaSalle Hotels said: "Investment sentiment remains robust for quality assets in key cities, however, this sentiment could soften over the next months if growth in hotel performance continues to slow across some of the key European hotel markets". At year-to-date February 2012 hoteliers posted a fall in revenue per available room (RevPAR) in some cities, such as Munich (-7.7 %), Düsseldorf (-11.5%), Amsterdam (-9.7 %), Zurich (-10 %) or Copenhagen (-2.6 %).

At the same time in Moscow we have the stable growth of main hotel indicators. Over January-February 2012 the average RevPAR (in euro) increased by 13.5% compared to the same period of 2011 and amounted to €84.41 (3,324 RUB).

Marina Usenko, Executive Vice President, Head of Jones Lang LaSalle Hotels, Russia&CIS, added: “In the beginning of 2012 the highest RevPAR growth in Moscow was demonstrated by Upper-Upscale hotels– RevPAR increased by 17.9% and reached 5,686 RUB, Mid-Market objects hold on the second place – RevPAR increased by 12.8% up to 3,198 RUB. The most expensive sector traditionally demonstrates the moderate growth – Luxury hotels RevPAR increased by 3.4% and totalled 6,386 RUB.”

“Moscow hotel sector offers the wide opportunities for investors firstly due to the positive market indicators (despite the competition intensification among the functioning objects) that guarantee the stable income by right asset management. It is good that the process has started – we see that the owners are more motivated to sell their hotels (in the nearest time we expect the completion of several hotel deals in Moscow) as well as we observe the professionalism growth of market players that understand the significance of professional approach to hotel construction and management – it concerns not only object sale but operational business regulation as well,” - underlined Marina Usenko.

The UK remained the most liquid market in EMEA during Q1 2012 with total hotel transaction volumes reaching €784 million, 52% of total EMEA transaction volumes. Activity was primarily concentrated on London with 11 hotel sales completing including the sale of the 4-star 129 room hotel Kingsley Thistle for about €51 million to a private client of Citi Bank.

Jon Hubbard, CEO Northern Europe Jones Lang LaSalle Hotels said: "London was once again one of the most active hotel investment markets in Europe and we anticipate further strong interest across the market, including for trophy assets. The pricing gap between regional UK and London hotels is widening and, while trading in many of the regions remains weak, we do not anticipate a significant uptick in transactional activity in those markets in the short to medium term, except where driven by distress."

In France, hotel transaction volume totalled €252 million in Q1 2012, 17 % of total EMEA transaction volumes. Activity was driven by three major hotel sales in Paris including the 4-star 617 room Pullman Paris Rive Gauche which was sold by Accor to French property company Bouygues Immobilier for €77 million.

In Germany, total hotel transaction volume amounted to about €70 million, 5 % of total EMEA transaction volumes. Significant transactions included the sale of a portfolio of 3 Pentahotels in Kassel, Braunschweig and Eisenach to the tenant HPI Germany Hotelbesitz GmbH (Hong Kong Chinese family owned group) and the acquisition of the Suite Novotel Hamburg City by German fund manager Deka Immobilien.


About Jones Lang LaSalle Hotels
Jones Lang LaSalle Hotels is a global real estate services firm focused exclusively on hotels & hospitality. We provide acquisition and financing advice, valuations, investment sales and asset management for luxury hotels, select service and budget hotels, smaller hotels and pubs, from single assets to large portfolios and mixed-use developments.
In the last five years we completed nearly 4,000 advisory and valuation assignments and more sale, purchase and financing transactions than any other hotels real estate firm in the world worth over $30 billion. With 44 offices in 20 countries and 265 hotels real estate experts, no other firm is better connected. Through our depth and breadth of research and experience, with 75 Research Reports each year, we know the market at every level, we know the players and we know how to get results. For further information, please visit our website www.joneslanglasallehotels.com