Real estate investment in the hotel sector remains very active in Barcelona, stimulated by the good evolution of tourism in the city in the last two years. In the first quarter, the sector has started with five purchases and sales for a total volume of 160 million euros.
The figure could have reached 240 million if the sale of the AC Hotel Barcelona Fòrum had been completed for 80 million, but the operation was stranded at the last minute in a Barcelona City Council commission.
The main transaction in the first three months of the year has been the sale of the Hampton by Hilton Barcelona Fira Gran Via by ASG to the British fund London
Compared to the start of last year, the volume is 30% lower, although, if the AC Fòrum operation is taken into account, it is equal. In addition, it must be taken into account that the 2023 financial year began with the sale of the Sofía hotel for 180 million. In the last seven years, the average investment in hotels in the city has been 340 million, including 2021, when the city's record of 778 million was set because the covid forced many hoteliers to cash in.
The sector considers that the greatest activity in the market will be in 2023 and at the beginning of the year it shows a trend. “Some of the operations closed in this first quarter are the result of a very long maturation process, although it is not a coincidence that they have been closed now,” comments the Cushman hotel partner.
“When we came out of the pandemic, there was a lot of talk in the sector about the champagne effect. That pool of savings has already been exhausted, but demand has maintained even with inflation. There is a change in consumption, where tourism products have gained positions in the order of consumer preference,” explains 3 Capital Real Estate partner, Juan Gallardo.
In recent years, investment interest in hotels in the Catalan capital has clashed with the high prices that the owners were asking for the assets. The sector has always pointed to Peuat as the main reason for this imbalance, the hotel regulation promoted by former mayor Ada Colau, since she considers that it has revalued the establishments already open in the city because it prevents new openings.
“A price adjustment is not taking place as has happened in other sectors such as offices or retail,” indicates the head of hoteliers at CBRE in Spain, Jorge Ruiz. The consultant also points to the good evolution of the sector as the main foundation to sustain the investment market. On the other hand, he points out that, with this scenario, Peuat no longer slows down operations, but ends up accelerating them. “In Barcelona, the offer is limited because new hotels cannot be opened. It is not like Madrid, where you can reposition an office building to the tourism business. If an asset goes on the market at a reasonable price in the Catalan capital, there is usually a lot of interest,” comments the expert.
For the end of the year, consultants prefer not to make forecasts, but they recognize that the signs are good. In this sense, they point out that there are several operations already underway that could bear fruit in the short term. Furthermore, it must be taken into account that all this activity is taking place in an environment of high interest rates. “The funds have been out of the game for a long time because the cost of debt prevented them from buying, but it is foreseeable that, starting in the summer, when the European Central Bank corrects the cost of debt downwards, they will gradually return to the market” says Halle.
On the other hand, heritage hotel companies can play an important role. “The bank is encouraging the sector because it also values the evolution of the hotel business very positively,” says Gallardo. “Just as in other segments of the real estate market the bank has the tap turned off, the situation is different in the hotel sector,” adds Ruiz. With cheaper debt, it is foreseeable that the market will accelerate operations.
