Hotel Investment Trends in Canada
August 17, 2011
Canada is continuing its upward trend, outperforming other western nations, according to CBRE Hotels Canada. CBRE estimates more than $1.5 billion of hotel assets are now on or will shortly be on the market. These assets are attracting a variety of high net-worth private investors, institutional and private equity buyers. This action will further drive transactions above the 2010 levels, as volume for the first half of 2011 is already 42 per cent ahead of the same time period the year before. The outlook for the Canadian hotel market is positive over the next 12 months.
Results for the first half of 2011 show a 2.8 per cent increase in national room demand and a 2.4 per cent decrease in average daily rate, according to Smith Travel Research. The year-to-date strongest room demand growth is found in the Alberta North and Kitchener/Cambridge markets, with findings of 19.0 per cent and 18.3 per cent, respectively. National room supply increased by 1.3 per cent in the first six months, with the majority of the supply happening in suburban areas and averaging 75 to 149 rooms.
There were a total of 33 hotel trades collectively worth of $507.1 million in the first half of 2011. The number of trades is down from 46 over the same period in 2010, while sale volume is up from $356.6 million. There has been an increase in the number of large scale trades to June 2011, with seven trades in excess of $20 million compared with three in the same period last year. The first six months of 2011 have included two trades of more than $50 million, while there were none reported at this time last year.
Q2 - 2011 Select Canadian Hotel Sales
| Name |
Location
|
Month |
Rooms
|
Price |
Price/Room |
| Radisson Suite Hotel Halifax |
Halifax, NS |
June |
104 |
$12,324,000 |
$118,500 |
| Delta Vancouver Airport |
Richmond, BC |
June |
414 |
$55,000,000 |
$132,900 |
| Comfort Inn Vancouver Airport |
Richmond, BC |
June |
129 |
$12,000,000 |
$93,000 |
| Sutton Place Hotel Vancouver |
Vancouver, BC |
June |
561 |
$163,625,000 |
$291,700 |
| Sutton Place Hotel Edmonton |
Edmonton, AB |
June |
313 |
$33,875,000 |
$108,200 |
| Delta Toronto East |
Scarborough, ON |
May |
371 |
$22,900,000 |
$61,700 |
| Holiday Inn Express Squamish |
Squamish, BC |
May |
95 |
$5,810,000 |
$61,200 |
| Benmiller Inn & Spa |
Goderich, ON |
May |
57 |
$1,550,000 |
$27,200 |
|
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