Europe, Africa, and the Middle East Hotel investments are expected to reach $11 billion in 2012, fueled by bank restructurings.

According to the latest Hotel Investment Outlook study from Jones Lang LaSalle Hotels, hotel investment activity in Europe, the Middle East, and Africa (EMEA) is likely to stay constant in 2012, with $11 billion in acquisitions projected, equal to the $10.9 billion in 2011. بي ام 

Deals to restructure debt will fuel a lot of this activity. Single asset deals will continue to drive the majority of activity in 2012, according to Jones Lang LaSalle Hotels.

Jon Hubbard, CEO of Jones Lang LaSalle Hotels in Northern Europe, tells World Property Channel, "The widening pricing disparity between primary and secondary properties, as well as the narrower spectrum of what constitutes a premier asset, will be a recurring trend in EMEA in 2012. High net worth individuals (HWNIs) and sovereign wealth funds will continue to buy trophy hotels in major gateway cities in the prime market. Despite their poor yields and high cost per key, such assets are seen as a long-term investment. The majority of equity-rich investors will come from the Middle East and Asia, and they will continue to pay record amounts for high-quality assets."

In 2012, the UK is likely to remain the most liquid market, with a minor increase in transaction activity. Distressed capital structure agreements will drive this, as banks must meet tougher capital requirements and uncertainty about the timing of capital value recovery grows, making the hold option less appealing " In France and Germany, transaction activity is likely to remain stable, with a possible increase over 2011 levels. Paris, like London, will continue to be the leading generator of investment activity across all sectors. Investors in Germany are expected to continue to prioritize assets in key cities with lower inherent risk, but they will also consider secondary assets or secondary cities that offer higher yielding investment opportunities ", said Christoph Härle, CEO of Jones Lang LaSalle Hotels in Continental Europe.

In contrast, following the sale of the Ritz-Carlton Moscow by Jones Lang LaSalle Hotels, Russia will experience a lack of trophy sales, resulting in lower total transaction volumes than last year, whereas Dubai is expected to benefit from its status as a safe haven and attract some investor interest, given that occupancy has returned to 2008 levels this year.

Hotel operators are likely to become more active purchasers on unencumbered assets in 2012, jointly investing with other investors, while development continues to be hampered by a shortage of financing. As they transition from a "asset light" to a "asset right" approach, these companies will continue to buy hotels in strategic areas to gain market share, increase market share, or build new brands.

Hubbard went on, "Softer yields will also entice more private equity groups to enter the market. For those investors, the increasing number of distressed assets coming onto the market, selling at discounted prices with greater yields, will present opportunities. Private equity funds will likewise be in disposition mode in 2012, as they have expiring debt on their books that must be refinanced."

On the sell side, banks will continue to play a key role, putting hotels into receivership and putting distressed assets on the market. The UK Marriott portfolio of 42 assets, the Hyatt in Birmingham, and the famed Belfry Hotel & Golf Resort are among the hotels that are currently being sold and expected to transfer in 2012.

The shortage of debt will continue to be the market's principal restriction in 2012, with loan-to-value ratios of 50 percent to 60 percent for developments and loan-to-construction-cost ratios of roughly 50 percent. As a result, smaller lot sizes will continue to draw more attention because they demand less cash.

"Despite government pressure to expand lending, the sovereign debt crisis will persist into 2012, and there is no realistic chance of major new debt arising in 2012. To reestablish confidence in the financial markets, several countries will enact more austerity measures. Western Europe's growth is expected to drop to 0.3 percent in 2012 due to high private savings rates and limited bank lending availability. Due to the large number of stocks available, investors will be required to be more selective in their purchases "Härle came to a conclusion.