February 6, 2019- JLL Projects 2019 Global Hotel Investment Volume Will Total $67 Billion.
Cautious yet confident may best describe the global hotel market’s investor sentiment, according to JLL Hotels & Hospitality’s annual Hotel Investment Outlook. The newly issued report projects global hotel investment volume will reach $67.2 billion, nearly equal to 2018’s total of $67.7 billion. While there is anticipated moderating economic growth and geopolitical uncertainty, hotel property performance remains secure, travel and tourism are expected to reach another record year and investors seeking more yield are increasingly turning their sights toward hotels.
JLL Hotel Investment Outlook report is a forward-looking, global analysis of trends affecting the hotel investment market.
Within the report, there is outlined crucial several investment drivers for 2019:
Robust levels of global fundraising activity for hotel investments. Close-ended private funds raised $28.8 billion globally in vehicles with either a hotel focus or a hotel component as part of a broader strategy in 2018. JLL anticipates these funds will pursue more large-scale investments to deploy capital and shift strategies toward private debt fundraising efficiently.
Hotels’ appeal to generalist investors. During the past five years, approximately 70.0 per cent of global hotel investments were made by generalist investors who invest in multiple asset classes. Given hotels’ attractive yield profile, JLL expects investors will continue to seek entry into real estate, particularly hotels.
Increased international capital flows. In 2018, the most significant capital inflows targeted Europe, driven by the Middle East and Asian investors. JLL anticipates international activity will increase in 2019, driven in part by inflows to Europe, North America-based investors turning the focus toward markets across Asia and cross-border capital exploring portfolio opportunities, including those with assets located outside of primary markets.
Brand and hotel company M&A activity. Top hotel brands account for less than one-third of hotel rooms globally, and in 2019, JLL expects to see more targeted acquisitions of unique concepts and locations to complement existing product offerings.
“Investment activity exceeded expectation in 2018, and we believe 2019 will be another strong year for global hotel investment, with a significant amount of debt and equity liquidity and competitive bidding for assets, given continued strength in fundamentals,” said Mark Wynne Smith, Global CEO, JLL Hotels & Hospitality. “Notwithstanding the more cautious backdrop, large ongoing portfolio and entity-level activity, hotels’ attractive yield profile and record levels of dry powder will drive global hotel investment momentum.”
find a copy of the report here: https://www.hotel-online.com/images/logos/JLL_HotelInvestmentOutlook_Feb2019.pdf