2015 first half hotel transaction volume the highest since 2007
Aggregate hotel transaction volume reached more than $915 million for the first half of the year with the sale of 55 hotels across the country. This represents a 60 per cent increase from the same period in 2014 and surpasses the highest first-half volume on record since 2007 ($871 million). Contributing to this tremendous activity were two strategic trades, representing 40 per cent of aggregate volume and totaling $367 million. When excluding strategic deals, traditional transaction volume was slightly below the $570 million in deal volume recorded for the same period in 2014.
Pricing metrics trended positively from mid-year 2014 with average price per room growing 46 per cent to $106,100. When removing strategic trades, average price per room still improved considerably, growing 6 per cent from $72,800 to $76,900. Second quarter transactions illustrate the mix of product-types that sold in the last three months from smaller limited service assets such as the 58-room Comfort Inn Barrie in Ontario which sold for $3.21 million ($55,300 per room) to the full-service 254-room Delta Brunswick in Saint John, New Brunswick which sold as part of a larger retail and office complex for a combined $57 million (hotel allocation confidential).
- Western Canada led the country on per room pricing (due to strategic trades), while Eastern Canada led on volume.
- Ontario maintained its spot as the most active investment market accounting for 48 per cent of deal volume, followed by British Columbia (33 per cent) and Quebec (9 per cent).
- Atlantic Canada (Provinces east of Quebec) accounted for just 3 per cent of national deal volume, in-line with historical transaction trends.
- The bulk of national trades were located in secondary and tertiary markets while urban markets accounted for the majority of deal volume.
- Toronto continued to be a hot-spot for investment with 11 trades accounting for 39 per cent of national volume.