Italy Hotel
investment
snapshot
Q3 2016
Highlights
Volume 2015 (m)
Top Deal 2016
Cross-border 2015 (€m)
€795 (+47%)
Westin & St Regis
€622 (79%)
Driven by the Westin
Excelsior Rome and Starwood
Portfolio sales, the
investment volume picked up
in 2015 reaching the highest
value since 2012
Sale of Westin & St Regis
hotels (271 rooms) in
Florence to Qatar-based
Nozul Hotels & Resorts in Q2
2016
Cross border activity remain
high with HNWI, Sovereign
Funds and Operators continue
to seek Trophy Assets or
properties in top markets
Yields Trend
As a result of higher level of
liquidity and dearth of graded
investment opportunities
keener Yields have been
registered in the Italian
market
Transaction volume
Investors profile
Investor interest in Italy peaked up in 2015 when the investment
volume recovered the pre-crisis level, marked by the sale of
Gritti Palace in Venice to Qatar-based Nozul Hotels & Resorts.
Over the last years sales of prime assets in Italy has been almost
exclusively to international investors, with the investment
market dominated by High Net Worth Individuals and Sovereign
Funds seeking unique investment opportunity and trophy assets
in the prime markets.
The trend continues over the first three quarters of 2016 and a
record year is anticipated with the investment volume expected
to exceed €1bn.
Notable deals in 2016 include the sale of Aldrovandi Palace in
Rome to the Turkish-based Dogus Group and the sale of NHOW
Milan by Blackstone to Finint SGR. Relevant portfolio sales were
finalized with the acquisition of the Royal Demeure Portfolio,
including the Hotel d’Inghilterra in Rome and the Helvetia Bristol
in Florence, by the Italian hotel group Starhotels and the sale of
the Westin and St.Regis in Florence to Qatar-based Nozul Hotels
& Resorts for €190 million.
Hotel Investment in Italy (2011 – Q3 2016)
1,000
900
800
700
600
500
400
300
200
100
0
In the last two years, the hotel investment market in Italy is
significantly more liquid and increased its appeal to buyers.
Additional investors such as value add investors, hotel operators
and core investors are actively looking and investing in the
Italian hotel market.
Real estate developers returned to invest and a solid pipeline of
office building conversions into hotels is running in the heart of
Milan. The hotel investment market is also benefiting of a
positive attitude from banks to finance hotel acquisitions and
new developments.
Investment Volume Italy 2015 by Asset Class
7.90%
12.90%
€m
15.40%
63.20%
2011
2012
2013
Single Asset
2014
Portfolio
2015
Q3 2016
Retail
Office
Hotel
Logistic
EY
Assurance | Tax | Transactions | Advisory
Italy Hotel investment snapshot
Cross-border capital flows
Cross-border interest has been historically high in the Italian hotel market, with
foreign sovereign funds, HNWI and hotel operators seeking trophy assets and
presence in Italian main destinations. In 2015 Cross-border investment volume
reached a level of €622million mainly supported by Middle East investors with the
acquisition of Gritti Palace by Nozul Hotels & Resorts for €105million and sale of
Westin Excelsior and Boscolo Aleph. US and UK investors contribution also remains
relevant with the Starwood portfolio sale acquired by a JV between Benson Elliott,
Walton Street Capital and Algonquin. As at Q3 2016 the cross-border investment
volume is €390 million mainly composed by the acquisition of the Starwood
Florence Portfolio by the Qatari Nozul Hotels & Resorts.
Notable transactions
Year
Hotel
City
Grade
NH Ambasciatori
Turin
4
199
Internos
Germany
San Domenico
Taormina
5
108
Gruppo Statuto
Italy
Arenella Resort
Sicily
4
460
York Capital
UK
Rio Novo Project
Venice
Na
Na
Axa IM
France
Westin & St.Regis
Florence
5
271
Nozul H&R
Qatar
Nhow Milan
Milan
4
246
Finint SGR
Italy
Royal Demeure
Portfolio
Various
4-5
258
Starhotels
Italy
Valtur Portfolio
Various
3
927
Valtur
Italy
Accor Portfolio
Rome
4
246
Accor
France
Aldrovandi Palace
Rome
5
103
Dogus Holding
Turkey
Holiday Inn Parco
dei Medici
Rome
4
317
2015
Q4
Starwood
Portfolio
Various
4-5
1.052
2015
Q4
NH Santo Stefano
Turin
4
125
2016
Q3
2016
Q3
2016
Q2
2016
Q2
2016
Q2
2016
Q2
2016
Q2
2016
Q2
2016
Q1
2016
Q1
2015
Q4
Rooms Buyer
Buyer Origin
CPI Property
Luxembourg
Group
Benson Elliott /
Walton Street
UK/USA
Cap / Algonquin
Internos
Germany
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About EY Hospitality
The EY Hospitality practice includes more than
250 professionals globally, providing
multidisciplinary services, including support with
strategic planning, acquisitions, debt/ equity
raising and restructuring, operations and
development for every hospitality-related
segment.
The Italian Hospitality team includes 9 full-time
dedicated professionals, boasting a longstanding experience and knowledge of the
market, having worked on more than 300
hospitality projects across Italy. Our service
offering represents a unique one-stop shop
opportunity to support every player in the
hospitality industry, including M&A, Transaction
support, Operator selection, Valuation,
Development advisory and Construction
Advisory Services.
© 2016 EY S.p.A.
All Rights Reserved.
This material has been prepared for general informational
purposes only and is not intended to be relied upon as
accounting, tax, or other professional advice. Please refer to
your advisors for specific advice.
Outlook
Following an extremely positive 2015 when the transaction volume increased by
more than 45% reaching €795million, in 2016 the value of hotel assets traded is
expected to exceed €1 billion having reached €770million at the end of third
quarter.
The Outlook is expected to remain positive for the following months, thanks to
positive and solid market fundamentals. Therefore the interest of international and
domestic investors is expected to remain high. In particular, Value Add investors
are expected to remain active, particularly on the NPLs market which have seen
several portfolios brought to the open market by major domestic banks.
New international hotel operators, particularly from Asia, continue to seek
presence in the main markets such as Rome, Milan, Florence and Venice with
strong preference for existing assets rather than developments. Moreover, an
increasing number of leisure operators commenced to actively looking at south of
Italy, as a result of the geopolitical instability in other Mediterranean markets.
Noteworthy, the interest of Core investors, seeking graded yielding investment
product has increased over the last months, confirming that Italy is now perceived
as a more stable and safe market.
For more information, please contact:
Marco Zalamena
EY | Partner, Hospitality
Tel: +39 02 806693711
E-mail: [email protected]
ey.com/hospitality