Skip Ribbon Commands
Skip to main content

News Release

London - Moscow

Few willing sellers in the EMEA hotel market

Trading expectations show ray of hope for hotel investment market

London - Moscow, 28 May 2009 – The lack of pricing consensus has resulted in hotel investors choosing to hold assets as they wait for better conditions to emerge - according to the latest Hotel Investor Sentiment Survey (HISS) from Jones Lang LaSalle Hotels. The survey has also suggested that there are some exceptions including Dublin, Lisbon and the Spanish resorts, which have been hit harder by the recession, where investors are now keen to cut their losses and sell as any upside from a recovery appears too distant.
Mark Wynne-Smith, CEO of Jones Lang LaSalle Hotels in EMEA, said: “This latest survey confirms the reasons for the exceptionally low levels of transaction activity as it shows that investors are very unsure about 2009 income levels and nobody likes to buy in to a falling market. As economies across EMEA continue to deteriorate, investors will start to scan the market for investment opportunities, but mainly in the form of distressed assets, non performing loans or performing assets priced on 2009 projections in key gateway cities such as London or Paris.  The survey shows that there is consensus pricing amongst buyers but certain sellers need to smell some more coffee before they will see their assets sold”.
A marked decline in short term trading expectations has occurred across all cities in EMEA, with the lowest expectations reported for cities in Central Eastern Europe (CEE) and the UK. CEE, which initially proved resilient to the financial downturn, now looks set to face a more severe recession compared to Western Europe. With global tourism expected to fall substantially, investors are expecting hotels performance to decline in coming months, in particular for markets which have experienced substantial supply growth in recent years, notably within the MENA (Middle East North Africa) region.
Marina Usenko, Executive Vice President, Jones Lang LaSalle Hotels added:”Foreign investors, previously active in Russia, have scaled down their activity substantially since mid-2008 due to the country/business risks as well as the fact that the local sellers have not yet accepted the new pricing logic”.

Medium term trading expectations have improved for almost half of all cities tracked in comparison to the last survey in October 2008, the majority of which are located in Western Europe. Cuts in interest rates, quantitative easing measures and a sense that we are approaching the bottom of the market appear to be the reasons behind this conclusion.
Yield requirements continued their upward trend and increased on average by 120 basis points since the last survey in October 2008. The softening of yields was most notable in Spain and the UK, but was less severe in other western European countries such as Germany and remained lowest for key gateway cities. The highest yield requirements were reported for Moscow and Zagreb. Wynne-Smith continued: “With yield requirements reaching an average 9.2% for the region, investors have become very risk-averse and are currently favouring a return to the comfort zone of their home markets.
Going forward, sentiment appears unlikely to worsen markedly and the positive signs appearing in the US equities market could indicate that the bottom of the market is in sight but the responses do not suggest that the reaching the bottom of the market will necessarily mean the start of a period of recovery. “We expect to move into a period of stabilisation starting in the last quarter of 2009 but the coming six months are crucial in determining if the month on month percentage falls will generally reduce in size” concluded Wynne-Smith.

About Jones Lang LaSalle Hotels
Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide the depth and breadth of advice required by hotel investor and operator clients, through a robust and integrated local network. In 2008, Jones Lang LaSalle Hotels provided sale, purchase and financing advice on over $3.7bn worth of transactions globally relating to more than 120 assets. In addition, advisory and valuation services were provided on more than 600 assignments. The global team comprises over 220 hotel specialists, operating from 32 offices in 19 countries. The firm’s advice is supported by a dedicated global research team, which produced 87 publications in 2008 in addition to client research. Jones Lang LaSalle Hotels’ services span the hospitality spectrum; from luxury single assets and large portfolios to select service and budget hotels, resorts and pubs. Their services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator selection, management contract negotiation, consulting, industry research and project development services. Jones Lang LaSalle Hotels’ clients have access to the resources of its parent company, Jones Lang LaSalle (NYSE: JLL).
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specialising in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2008 global revenue of $2.7 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.3 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $41 billion of assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg, Kiev and Almaty. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008 and 2009 at the Commercial Real Estate Awards (Russia). For further information, please visit our Web site,