'The final quarter of the year saw transaction volumes hit €746 million ($667 million), representing 56.0% of total volume across Europe in 2001, showing a strong run at the end of the year despite 11 September and its repercussions,' said Nick Marsh, executive vice president at Jones Lang LaSalle Hotels.

Jones Lang LaSalle Hotels acted as advisor to the owners of the five-star Hotel Arts Barcelona which was sold to Deutsche Bank AG's Private Equity Group in December and represented Europe's largest hotel transaction of the year at €285 million ($255 million). 'This deal was a watershed for the European hotel sector, demonstrating that investor interest for quality assets in city centres is robust' said Marsh.

Another deal done by Jones Lang LaSalle Hotels in December was a 300-room hotel development at Charles de Gaulle Airport in Paris, which was bought by the German open-ended fund, Commerz Grundbesitz Investmentgesellschaft mbH (CGI), for €37.5 million ($33.5 million). 'The German funds have a healthy appetite for hotel assets to act as a diversifier to their real estate portfolios. The funds have been witnessing substantial cash in-flows in Germany as a result of the poor stock market performance, they have a low cost of capital and are thus very competitive in the sector' said Christoph Härle, director, Germany, at Jones Lang LaSalle Hotels. He added: 'This deal reinforces the cross-border investment strategy that many of the open-ended funds are currently pursuing'.