TORONTO ― Canada’s lodging investment market continued its upward trend in 2014, with deal volume increasing by 28 per cent year-over-year, reaching $1.46 billion, according to the “2015 Canadian Hotel Investment Report” by Colliers International Hotels.
Several factors have contributed to the investment activity in 2014, and will likely continue through 2015, said Alam Pirani, executive managing director with Colliers. “Improved hotel operating fundamentals, favourable lending conditions, a healthy supply of investment opportunities and a diverse pool of traditional and new investors seeking to expand their portfolios within this market segment are all contributing to the growing interest in hotel investments.”
According to Colliers’ analysis, full-service properties were the most dominated class asset traded in 2014, representing slightly over half (52 per cent) of the transaction volume with 32 trades totalling $750 million. Focused-service assets and limited-service properties also showed strong demand from investors, representing 27 per cent ($391 million) and 22 per cent ($314 million) of total transaction activity, respectively.
For 2015, Colliers forecasts a continuation of robust hotel investment activity in Canada in the $1.25 billion to $1.5 billion range, supported by various macro-economic conditions such as a weakened Canadian dollar, strong RevPAR performance and increased appetite by foreign investors to invest their capital in a safe and stable market.