According to studies by the internationally active real estate consultancy Cushman & Wakefield, the German hotel market recorded a total transaction volume of EUR 1.3 billion in the first half of 2020, a decline of 11% compared to the previous year. The strong first quarter with a transaction volume of EUR 1.0 billion was followed by significant regression in the second quarter to around EUR 317 million, due to the Covid-19 Pandemic; the volume recorded in the last three months was almost three times below the result for the corresponding quarter in 2019 (Q2 2019: EUR 380 million).
German buyers were responsible for almost 60% of the transaction volume in the first half of this year. A relatively high proportion was accounted for by Aroundtown's 77.5% stake in TLG with a total of eight hotels and the sale of four of its hotels to the French investor Primonial REIM. Both transactions made up around 35% of the total transaction volume.
The largest transactions in the second quarter included:
- The sale by PAI Partners of the Dutch holiday park operator Roompot to KKR for approximately EUR 1 billion. Among the 33 holiday parks owned are two holiday resorts in Cochem on the Moselle and Bad Bentheim.
- The sale of the 180-room Meliá Innside Premium hotel in Dresden by Norpexal Holding SA and Fibona GmbH to European Property Holdings (EPH), which is listed on the Swiss Stock Exchange. The property is the subject of an operating lease with Meliá Hotels International until 2029.
- The sale of the 304-room Nhow Hotel in Berlin by the Canadian Jesta Group, also to European Property Holdings (EPH). The lease contract with NH Hotels has a term of approximately 15 years remaining.
- The Park-Hotel Egerner Höfe at Tegernsee was bought by the Allgäu dairy entrepreneur Christian Ehrmann. The 98-room hotel was previously owned by the von Moltke family, who ran the property themselves.
"The sharp decline in the second quarter was marked by the Covid-19 Pandemic and its impact on the transaction market. Numerous transaction processes were suspended or postponed indefinitely during this period. Nonetheless, the majority of institutional investors continue to consider investing in hotels as an asset class, either with a price discount or by focusing on Core properties. Much more attention is also currently being paid to the creditworthiness of the lessees, the guarantee package and the level of the operating rent. In recent weeks, we have been increasingly observing an initial, slight recovery of the markets, albeit at a low level. There are currently a number of transactions in the market, and so we will certainly see increased activity again in the second half of the year, albeit not yet at a normal level". Stefan Giesemann, Head of Hospitality Germany & Austria at Cushman & Wakefield.