Hotels investment grows double digits
Investment in hotels in Portugal has grown double digits despite a generalised downturn in the rest of Europe.
In the first six months of 2023 alone investment grew by €300 million with Portugal’s continued boom in tourism explaining part of the increase in new hotels.
This year’s numbers were driven by the sale of the Dom Pedro hotels in the Algarve and Madeira to the British fund Arrow, a transaction that represented 40% of total investment in the sector, and explains 55% of total investment for the first half of 2023 according to data from the real estate consultants CBRE.
But even so, contrasting with the falling trend in the rest of Europe, the hotel business is booming in Portugal, a phenomena recognised by Cristina Siza Vieira, CEO of the Portuguese Hotel Association (AHP) which “goes to show that the appetite for Portugal continues to be fundamentally strong”.
The sale of the Amendoeira Golf Resort in Silves to pension fund Pensão Agrícola and a three-star hotel in Lisbon (The investor’s names have remained confidential) were other big deals in H1 of 2023 according to CBRE.
Hotel transactions in H1 represented 40% of all commercial real estate transactions for the period (€740 million), numbers which are in line with those of rival consultancy Cushman & Wakefield which calculated 35% of the total.
However C&W has been more conservative on the total value, placing it at €225 million — an increase of 21% like-for-like.
By the end of the year the total amount invested is expected to increase by €300 million bringing the total for the year as things now stand to just over €1Bn based on projects and transactions in the pipeline.
In the first half of the year 30 new hotels opened their doors in Portugal. In the same period last year 29 new hotels were opened because of a lack of beds in Portugal to cover increased demand from tourists and visitors.
Image: Dom Pedro Hotel Vilamoura.