Dubai: Investors are keen on buying luxury hotel assets in the next six months, mainly in Mena and Europe.
According to the Hotel Investor Sentiment Survey by Jones Lang LaSalle, 40 per cent of respondents indicated their interest in buying hotel assets in major European cities, including Paris, Vienna, Amsterdam and Warsaw as well as key German cities. “Survey results indicate that confidence in hotel real estate is holding up well despite the economic problems in Europe,” said Gabriel Matar, Regional Director- Middle East and Africa of Jones Lang LaSalle Hotels. However, 28.8 per cent of those respondents said they were targeting luxury assets, predominantly in Dubai, Abu Dhabi and the French Riviera.
“Since the downturn of 2009, Dubai hotels have reported a strong recovery in occupancy and average daily rate (ADR) levels. In light of a slowing development pipeline and political stability in the country, investors believe that Dubai’s operating fundamentals will continue to improve in the short and medium term. Dubai is the best performing Mena (Middle East and North Africa) hotel market and is certainly the one to watch in 2013,” Matar added.
In 2009, Dubai’s hotel investments witnessed a big downturn of 63 per cent to €2.9 billion, from the same period a year before, read a report by Jones Lang LaSalle. But hotel investments took a positive turn around 2010. According to the Dubai Government, tourism, trade, transportation and logistics accounted for around 60 per cent of the UAE’s GDP in 2011.
Dubai has recently been ranked 16th globally as one of the top hotel investment destinations, according to a 2012-2013 report by consultancy Cushman & Wakefield. The report pointed out the soaring growth in Dubai’s tourism sector, indicating that hotel investments went up more than 30 per cent to over $390 million between the third quarter of 2011 and the second quarter of 2012, as compared to the same period a year ago. Dubai was the only city in the Middle East listed in the report.
The survey noted as well that trade in Mena region has jumped in the last 6 months, but maintained that the prospects in the near term remain slightly negative.
The writer is a trainee at Gulf News.