Jones Lang LaSalle Finds Growing Interest in Latin American Hotels
By Kerry Medina
June 11, 2012 10:58 PM
Hotel investors are becoming increasingly captivated with the outlook for investment opportunities in Latin America, according to the results of Jones Lang LaSalle Hotels’ first Latin America Hotel Investor Sentiment Survey. The survey, conducted in April, finds a majority of the top 500 investors active in Latin America are targeting the gateway markets for purchases, while broadening their scope to secondary cities for development.
Among the highlights from the survey, investors’ outlook for hotel performance fundamentals across Latin America is exceedingly positive, with respondents most bullish on Mexico City, Brazilian metropolitan areas, Los Cabos and Cancun/Riviera Maya. Respondents’ targeted capitalization rate (initial yield) for the acquisition of an international-grade hotel averages 10.2 percent across Latin America. Hotel assets in gateway markets represent the biggest “buy” targets; the highest sentiment to “build” new hotels is reported for secondary cities as the survey suggests a considerable increase in the number of investors reviewing development feasibility in markets outside of the countries’ capital cities. Surging home-grown demand is dramatically boosting the performance of the lodging industry across Latin America, creating an attractive environment for growth.
“With a population of nearly 600 million, we expect the region’s hotel investment market to transform itself over the next decade,” said Clay Dickinson, executive vice president for Jones Lang LaSalle Hotels Latin America region. “And hotel investors are responding with an exceedingly positive outlook for both investment and performance in the short and medium term for many countries in the region.”
Jones Lang LaSalle Hotels Latin America Hotel Investor Sentiment Survey highlights investors’ hotel performance outlook and ranks investment considerations for 18 markets across Latin America.