The good health that the tourist activity enjoys means that the eyes of the investment funds are in a permanent situation of alert before the possibilities that may arise to acquire hotel assets in the Canary Islands. This is attested by 56 million euros that were traded in this market during the first quarter of the year. The Islands concentrated 14% of the 400 million euros that moved throughout the country.
The report prepared by the real estate consultancy CBRE and made public yesterday places the fall in investment at 59% throughout the country and at 62.5% in the Archipelago; 595 million euros less than in the first quarter of last year throughout the country, 93.5 of them in the autonomous community. It is true that at the start of 2022 a large number of operations were unlocked that remained in stand by after the outbreak of the health crisis.
The financial cost and instability cool the market by 62.5%
“It was a record-breaking exercise,” They pointed out from CBRE to qualify the comparison. However, if the behavior of this market is observed in the first quarters of the last five years, the fall is 22%.
The reason for the cooling is also found in the policy of increasing the price of money deployed by the main world central banks to contain inflation. «It mainly responds to the tightening of the financing market, that has made sales more expensive,” explained the director CBRE Hotels Iberia, Jorge Ruiz.
to that increase in financial costsjoined Ruiz “macroeconomic uncertainty, that affects the behavior of institutional investors. The traditional panic that capital shows in any situation that is barely controlled is transferred in this case to investment in assets in the accommodation sector.
inauspicious context
The current context, with the Russian invasion of Ukraine and how it is affecting – in addition to the world political order – strategic markets such as raw materials and energy, It is one of those unfavorable scenarios for the proliferation of transactions in all areas.
These operations had as main protagonists –eight out of every ten euros traded– to large investment funds. Also in the case of the Canary Islands, where in several of the cases they appear together with a local hotel chain in the three completed sales.
Institutional funds and local hotel chains play the leading role
Accepting the year-on-year decline and that of the last five years, industry sources explained that it would not be good news if there was a massive change of hands. That would mean that there are many owners wanting to drop ballast, while the current scenario responds to a time when the activity is profitable and companies, in general, present a healthy level of capitalization.
Therefore, there are no reasons to dispose of assets, so those who want to fatten their asset portfolios should wait for opportunities to appear propitious for this and at prices that guarantee to be above the break-even point in the medium term.
Vital Suites, in Gran Canaria; Las Águilas, in Tenerife, and Oasis Village, in Corralejo, were the sales
CBRE recorded three operations in the Islands. Two of them had as their object individual properties with a four-star category. The Hotel Las Águilas is located in Puerto de la Cruz (Tenerife), has 216 rooms and was acquired in February by the US investment manager Apollo Global Management. In July of last year, it began to be marketed under the Affiliated by Meliá brand by ADH Hotels & Resorts, from the Apollo Global Management group.
The other four stars that changed hands in the Archipelago was the Vital Suites Residencia, acquired by the Italian group Tam Resorts also in the second month of this year. It is the fourth asset that this same investor has made, who began his acquisitions in the south of Gran Canaria in 2010, where he already has the Silvi Villas and the Alhambra Boutique apartments. The remaining establishment, Hotel Eden, is located in the Meloneras area.
The third and last operation came in March and had a distinctly Canarian accent. The hotel division of the Hermanos Domínguez Group, HD Hotels, acquired the Oasis Village hotel in Corralejo. This three-star –232 apartments– will be the scene of a comprehensive remodeling to reposition it in the market and integrate it into the group’s expansion strategy in the Islands.
In Spain as a whole, it was the French investors who gained the most prominence, with 61% of the operations. Only the Dolce Sitges and the Sofía Barcelona concentrated more than 60% of the total hotel investment that took place in the quarter.
