CBRE: Germany is still tops for hotel investment in Europe

According to the latest data from commercial property advisor CBRE, European hotel investment reached €7.4 billion in the fourth quarter of 2016, an increase of 19 percent in transaction volumes compared to Q4 2015.

Overall, European hotel investment activity in 2016 totaled €20.4 billion, despite transaction volumes decreasing by 7 percent compared to 2015. However, 2016 was still considerably higher than the long-run average and recorded the second-highest annual deal volume for the European hotel sector. 

The German hotel investment market proved one of the most attractive investment markets in Europe, achieving an increase of 45 percent year-on-year in Q4 2016 and contributing a record €5.1 billion of completed deals in 2016. CBRE attributes this to Germany’s strong market fundamentals and abundance of quality hotel assets.

Virtual Roundtable

Post COVID-19: The New Guest Experience

Join Hotel Management’s Elaine Simon for our latest roundtable—Post COVID-19: The New Guest Experience. The experts on the panel will share how to inspire guest confidence that hotels are safe and clean and how to win back guest business.
Learn more about Europe's hospitality scene at the IHIF Conference, March 6-8 at the InterContinental Berlin.

Likely as a result of deals delayed in anticipation of the Brexit, UK hotel investment transaction turnover reached €4.37 billion in 2016, a decline of 53 percent from 2015. While the level of transactions declined, hotel yields in London remained stable despite the outcome of Britain’s EU referendum result.

“The last quarter of 2016 saw a surge in deal completions following a sluggish third quarter,“ Joe Stather, CBRE Hotels, said. “This was mainly down to many investors deferring decisions and awaiting clarity post the UK’s referendum on the EU membership. A positive end to the year and a strengthening deal pipeline across countries such as  the UK, Spain, Germany and Italy would suggest that we are likely to see buoyant deal volumes for the first half 2017.”

CBRE also reported a "notable shift" in where European hotel investors were based last year. Domestic investment increased, accounting for 12 percent of European hotel deals during 2016, and there was also greater intra-regional cross-border activity, notably from Norway and France. Despite having dominated the acquisitions of hotel portfolios in 2015, East Asian and South-East Asian investors were less active in 2016, along with the predominately opportunistic funds of the U.S.

Follow IHIF 2017 on Twitter @IHIF_News and use #IHIF2017 to stay up to date with the latest news from the leading annual meeting place for the industry. Also find us on Facebook and join ourLinkedIn group for industry insight and discussion.

Suggested Articles

M3 has partnered with Avero, a restaurant revenue-management software company serving the food-and-beverage industry.

Wyndham is relaxing requirements for Wyndham Rewards members to achieve status for the rest of 2020.

This roundup features details on 15 new properties operating in the United States.