Hotel transactions in Q1 2017 marked the highest first quarter ever in Canadian history at $1.6 billion, states, Colliers International Hotels’ Q1 Transaction Market Highlights.

The bulk of Q1 activity was driven by the sale of bcIMC’s hospitality real estate portfolio of 25 hotels, which accounted for almost 70 per cent of the quarter’s volume. This transaction, as well as one other transaction that sold to a cross-border purchaser, collectively totaled $1.125 billion in volume, which represented 71 per cent of the quarter’s total. This trends in-line with 2016’s full-year 70 per cent foreign investor involvement.

Excluding the bcIMC/Silverbirch sale, a strategic transaction states the report, the quarter’s traditional volume totaled close to $500 million, pacing 48 percent above Q1 2016.

Trading activity within the traditional segment was elevated by the sale of several full and focused-service assets in major markets, with average price per key reaching $178,100. Colliers expects this metric to moderate later this year.

Hotel transactions

• In the traditional segment, investment activity was focused in Ontario with 12 transactions totaling nearly $400 million in sales (80 per cent of traditional volume), followed by Quebec (7 per cent, $32.4 million) and British Columbia (7 per cent, $32.2 million).
• The largest single asset transaction was the sale of the 977-key Westin Harbour Castle Toronto. Financial terms of the transaction are confidential.
• Q1 2017 results continued to demonstrate strength in the overall market and the ongoing theme of inbound foreign capital attracted to Canadian real estate. With several transactions closed in Q2 and a number of deals in the pipeline, both in the market and under contract, 2017 is on track for another year of healthy trading activity.