February 13, 2017

JLL predicts increased hotel investment activity in Sub-Saharan Africa

Dami Adepoju

Recent high-profile transactions in the Sub-Saharan hotel sector have industry experts predicting increased liquidity, leading to more open-market transactions in the future.  The landmark sale of the Movenpick Ambassador Accra demonstrated sophisticated investment strategies, and increased regional and international investment interest.  Where the few hotel transactions may have been kept closed in the past, there have been major deals announced since late December 2016, and into 2017.  JLL Africa, the regional outpost of the real estate advisory, has facilitated the sale of the Hyatt Regency Johannesburg at $36 million, to a Middle Eastern investment group in February 2017.  The firm is also exclusively advising Mara Delta, a pan African property fund, on its acquisition of a 44% stake in three Beachcomber-branded resorts and full ownership of hotel in Mauritius for a combined US$95.3 million.  These deals are currently in the final closing stages.

Hotels in the region have traditionally been owned by local high net worth individuals and families, but with more institutional owners also entering the space, there is greater transparency and structured investment strategies.  Xander Nijnens, senior Vice President for JLL Africa, commented, “Hotel owners are reviewing their real estate holding strategies and are more frequently opting to realise the capital gains on their assets and are recycling their equity into new developments and investments.”  Nijnens also remarked on the Movenpick Accra sale, highlighting that although several global players had shown interest in acquiring the asset, ultimately a regional player with greater understanding of the local market and the risks and rewards involved was selected.

 

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