TORONTO — The first half of 2018 saw just more than $800 million in lodging transactions in Canada, according to Colliers International Hotels’ latest INNvestment Canada report. This transaction volume paces 10-per-cent below comparable levels in 2017 ($893 million) when excluding strategic and M&A transactions, which represented a major component of activity in the first half of last year at $1.3 billion.
Following an influx of foreign and institutional capital into hotel real estate from 2013 to 2017, there is a mix of private domestic buyers driving activity in 2018, supported by a strong hotel operating and economic landscape, motivated buyer pool and dynamic debt markets.
Eastern Canada (east of Manitoba) led the country for transaction activity with 36 trades totaling $558 million in volume (70 per cent of the national total). Year-to-date, Quebec has surpassed Ontario as the top province for investment volume with the sale of several full-service properties, including Le Centre Sheraton Hotel, Marriott Château Champlain and the Delta Quebec.
Sales activity in Western Canada (west of Ontario) continued to rebound, with a nearly 80-per-cent increase in the number of trades and a more than 50-per-cent increase in deal volume year-over-year. This was buoyed by increased activity in Alberta and resumed trading in Saskatchewan.
Colliers estimates full-year 2018 transaction volume should range from $2.0 to $2.5 billion, representing a decline from recent years due to a moderation of available opportunities for sale in major urban centres.