Hotel Investors Increase Focus on Latin America for Counter-cyclical Investment Opportunities
Brazil offers long term growth during global economic softening
Jones Lang LaSalle Hotels reports that an increasing number of hotel investors are turning to Latin America for counter-cyclical investment opportunities. Hotel companies are researching market entrance strategies, conducting acquisition and new development due diligence, and analyzing future hotel demand in the 2014 FIFA Soccer World Cup candidate cities in Brazil.
Brazil’s still strong domestic demand is boosting hotel fundamentals and creating hotel investment and development opportunities. Some Brazilian markets have posted double-digit RevPAR growth thus far in 2008.
“Brazil will remain more insulated from the global credit crisis as its market has historically been a low leverage investment environment. While not immune to some economic softening in 2009, Brazil benefits from a very buoyant long-term economic outlook,” said Ricardo Mader Rodrigues, an executive vice president for Jones Lang LaSalle Hotels in São Paulo. “The most significant opportunity is to develop the underserved mid-market and budget sectors across the country.”
Columbia and Peru are also increasingly on the radar of international hotel investors. Columbia could be a standout thanks to its newfound political stability and increased demand fundamentals in cities like Medellín and Bogotá. Columbia has already begun to emerge as a stronger market and some regional players have been successful in rolling out developments in Bogotá, Cali and Santa Marta.
As an up-and-coming market, Peru has attracted increasing interest. “Lima, the capital, is growing steadily; while tourism in Peru is expected to continue to increase. There has been more interest in visiting the country, specifically Machu Picchu, and there are also some beach resorts in early stages of development,” said Mader.
The increase in Latin American hotel investment conferences indicate the growing level of interest in the hotel sector in Latin America: Real Estate Investment World Latin America was held in Miami in September; the first South America Hotel and Tourism Investment Conference took place in Buenos Aires later in the month; the ULI Fall Meeting and Urban Land Expo occurred late in October in Miami Beach, and the Hotels & Money Latin America conference in Miami this week.
“A strong economy, increasing real estate transparency, high risk-adjusted returns and a large and growing domestic market all support the region’s many opportunities for hotel development,” said Clay Dickinson, an executive vice president for Jones Lang LaSalle Hotels. “Our expanded platform in Brazil with a depth of local experts on the ground helps investors migrate the changing capital market dynamics. The demand for solid advice is fueling our strategic advisory business as more owners and operators turn to emerging markets for growth.”
About Jones Lang LaSalle Hotels | Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide both the depth and breadth of advice required by hotel investors and hotel companies, through a robust and integrated local network. In 2007, Jones Lang LaSalle Hotels provided sale and purchase advice on 259 hotel transactions globally; representing a combined value of US$13.9 billion, a total of 54,763 hotel rooms in 84 cities. In addition advisory and valuation services were provided on 660 assignments globally for 182,048 rooms across more than 300 cities.
The global team comprises over 270 hotel specialists, operating from 31 offices in 18 countries. The firm’s advice is supported by a dedicated global research team, which produced over 45 publications in 2007 in addition to client research. Jones Lang LaSalle Hotels’ services span the hospitality spectrum; from luxury single assets and large portfolios to select service and budget hotels, resorts and pubs. Their services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator selection, management contract negotiation, consulting, industry research and project development services. Jones Lang LaSalle Hotels’ clients have access to the resources of its parent company, Jones Lang LaSalle (NYSE: JLL).www.joneslanglasallehotels.com
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