Jones Lang LaSalle Hotels Forecasts Global Hotel Transaction Volume to Hold Steady in 2012- Worldwide transaction levels to reach $30 billion again in 2012

"Global hotel investment volumes surged impressively in the first half of 2011, with REITs leading the way and signs of debt market revival encouraging activity. Economic uncertainty returned in the second half of the year causing momentum to falter, although deals continued, especially in the United States, reaching our forecasted $30 billion worldwide, an increase of 13 percent over 2010 volume.

Despite the continuing economic uncertainty, Jones Lang LaSalle Hotels forecasts that global hotel transaction volume will hold steady in 2012 to again reach upwards of $30 billion in deals, according to initial results from the firm's Hotel Investment Outlook 2012 report.

So far, the dislocation in the financial markets has not impacted underlying trading fundamentals. This has reassured investors to a certain degree and has underscored the attractiveness of high quality, income producing hotel real estate as an asset class, said Arthur de Haast, Chairman of Jones Lang LaSalle Hotels. Constraint will be driven by illiquid markets and the shrinking balance sheet capacity of international banks to lend significant sources of new money. Still, the market will be flush with equity capital that will come into play.

Private equity players increased investment activity in the second half of 2011, and we expect them to remain ambitious in 2012. With significant buying power and risk tolerance in a volatile environment, they are in position to achieve opportunistic returns, de Haast said. Notwithstanding, deficient debt markets and limited availability of attractive acquisition opportunities will likely hamper higher levels of activity. Still, these players will selectively acquire assets in secondary locations, as well as distressed portfolios and non-performing loans. lire la suite