World Property Channel - Mexico

Positive Outlook for Mexico’s Hotel Market

World Property Channel

World Property Channel - Mexico

The outlook for Mexico’s hotel industry is positive as the country enjoys a promising economic and political environment, as well as new domestic investment vehicles.

In 2014, hotel acquisition volumes are forecast to increase 15 percent and exceed $700 million, making it the highest annual level of transaction volume on record, according to research firm JLL.

After a low of less than $100 million in hotel transactions in 2009, capital influx grew and hotel transactions topped $600 million in 2013.

Newly formed transaction vehicles such as FIBRAs — which operate similar to real estate investment trusts — and CKDs are driving the country’s record-level transaction volumes, accounting for 25 percent and 50 percent hotel acquisitions in 2012 and 2013, respectively, JLL reports.

Last summer, Starwood Hotels & Resorts announced it was expanding its Mexico portfolio by 30 percent.

In Mexico City, hotel transactions totaled $270 million in 2013, earning the title of Latin America’s most liquid hotel market, according to JLL.

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