Senior Director Tourism of CaixaBank, Helena Murano Carney joined us on The Lending Market panel at MR&H 2018. Read her Q&A below for a brief description of the lending landscape in the Mediterranean.
1) How would you characterize the overall state of hotel investment and development in the Mediterranean region?
Overall my impression is that it’s very active. The recent interest of institutional investors in resort type assets has revitalized the market, as well as growing tourism trends.
2) In what markets are you seeing the most amount of investment activity and why?
Being a Spanish bank, we see most amount of investing in the Spanish market, and also the Caribbean. Within Spain mostly islands (Balearics and Canary Islands), and Costa del Sol.
3) What is the biggest obstacle for a foreign investor searching for a project to invest in?
Right now I think the biggest obstacle is growing demand, growing prices, and entry barriers such as municipal planning and regulations. Our recommendation to investors is that they rely on locally established consulting companies to advise them.
4) How would you describe the lending landscape in hospitality real estate in Southern Europe?
There is a huge availability of money available, banks have a healthy appetite. What are the opportunities for banks and for alternative lenders? Banks are going into deals with more standardized or conservative structures, whereas alternative lenders are being more aggressive and obviously more expensive. We have a growing infrastructure to deal with hospitality clients throughout Spain, with specialized professionals who speak the same language as the clients, and have expertise in the risk and legal departments too.
5) What are the types of hotels and resorts being built and what has the best ROI? Branded? Select- or Full-Service?
All of the above. In our experience the key factor for better success, is identifying (or even developing) a niche product that works for the brand/destination/segment. What does NOT work in the resort industry is doing more of the same. Differentiation is key to “decommoditizing” the product.
6) How do you compare hotel development in the Mediterranean versus other classes of real estate? Is it a safer or riskier bet?
I don’t have the expertise in other classes of RE to give a strong opinion, my impression is that leisure travel to good destinations is less cyclical that other businesses, there is less demand risk because clients come from different source markets, so I would say it is a safer bet.
7) What are you most looking forward to at MR&H this year?
Visiting Greece and meeting up with business colleagues and new contacts.