INNvestment Canada: 2016 on track for record transaction volume

TORONTO —
According to Colliers International Hotels' INNvestment Canada mid-year transaction report, sales
momentum in Canada remained strong through the first half of 2016 with
transaction volume of more than $717 million. This represents a 31 per
cent increase over the first quarter of 2015 (when strategic acquisitions are
excluded).

With the
pending $2.1 billion privatization of InnVest REIT and other “significant
transactions” expected to close by the end of this year, Colliers’ report
suggests 2016 “is pacing to rank as one of the highest transaction volumes on
record.”

Transaction
highlights:

There were
61 reported trades during the first half of the year with hotel pricing
averaging $99,300 per key, representing a 29 per cent increase year over year
(excluding strategic trades).

Limited-service
properties represented 28 per cent of volume more than doubling year over year
to $199 million, but full service assets remained the most dominant by volume,
43 per cent or $306 million. This included large deals in Toronto, Ottawa,
Niagara Falls, Ont., Vancouver and Victoria, B.C.

The
focused-service segment grew nearly 40 per cent over last year to $213 million.
This segment saw the largest growth in average price per key to $103,700, an
increase of 20 per cent.

Geographically,
transaction activity in Eastern Canada accounted for almost 70 per cent of
volume. This was primarily in Ontario, where 62 per cent of transaction volume
took place. Average price per key reached $101,100 in the East, a 10 per cent
premium over Western Canada.

As for Colliers’
buyer analysis, private investors were most active in the Canadian hotel space
accounting for 34 per cent of volume ($199 million). Hotel investment companies
were also rather active accounting for 29 per cent of transaction volume as
were public companies with 26 per cent.