Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

Almost 70% of investors’ intention to buy hotels in Europe as strong or stronger than before

Verena Bauer • 15/07/2021

More than a third of investors intend to buy more hotels across Europe, according to one of the findings of a survey by international real estate consultancy firm Cushman & Wakefield (C&W) of more than 50 senior representatives of major private equity firms, funds, REITs and other institutional investors active in the European hotel real estate market. 

Despite the impact of the pandemic on the travel and tourism sector, only 21% of investors intend to reduce their hotel acquisition activities and only 10% have put their acquisition plans on hold for the time being. The companies surveyed invested a total of more than 26 billion euros between 2016 and 2020, acquiring 664 hotels with 127,642 rooms and thus accounted for around a quarter of the total hotel transaction volume in Europe.

Holiday hotels in the focus of investors 
Resorts have gained the most attractiveness among investors. Despite the complexity of their operation and seasonality, the majority of survey participants (70%) consider them more attractive now than pre- pandemic. This is due to the expected faster recovery and long-term growth prospects of leisure travel. 

Serviced apartments have also become more attractive to 60 % of the investors surveyed. Undoubtedly, their resilience during the pandemic, high profitability, low cost base and flexibility to shift into the medium or long-term commercial rental sector play an important role in this.

On the other hand, the losers are hotels that focus on hosting meetings, incentives, conferences and events (MICE hotels). In addition those properties, which are located at airports, are also significantly less of an investment focus for most investors than previously. 

However, C&W predicts a return of business travel and events as structured meetings and face-to-face events become more important again after a long period without physical gatherings. Also, 21% of respondents said their interest in acquiring MICE hotels has not been changed by Covid-19.

Germany ranked second in popularity after UK & Ireland region
When asked about geographical locations, the UK and Ireland are the top target regions for investors, partly because investors here expect greater price discounts. Germany, the Iberian Peninsula, France and the Benelux countries rank closely behind. At city level, Barcelona drew the greatest interest ranking among hotel investors, followed by London, Paris, Amsterdam, Munich and Berlin - Hamburg was also named as a particularly interesting market by investors. 

"The results once again underline investors’ confidence in the European hotel market and its medium-to-long-term prospects. It is particularly interesting that the respondents want to continue to push ahead with hotel acquisitions regardless of investment strategy and cost of capital. Germany remains a popular investment destination and safe haven, especially due to the large number of strong secondary markets, so that demand already exceeds the supply of investment product," comments Stefan Giesemann, Head of Hospitality Germany & Austria at Cushman & Wakefield.

Market recovery
Broken down by market type, leisure destinations are expected to recover faster. 85% of respondents expect performance to fully return to 2019 levels by 2023 (RevPAR). 

Regional cities are expected to follow, with 77% of survey respondents expecting a recovery between 2023 and 2024. A slower recovery is expected for major cities, which are often more dependent on international and business travel. Nevertheless, 75% of investors surveyed expect recovery between 2023 and 2024 and 21% by 2025, a more optimistic view than the recovery following the 2008/2009 global financial crisis, when it took an average of 5.6 years for hotel RevPAR in major European cities to return to pre-crisis levels.

Moderate price reductions expected
Hotel disposals at reduced price levels due to the pandemic were a frequently-cited reason for real estate investors to raise capital to invest in hospitality properties. However, the survey found that the majority of them (59%) only expect buying opportunities at a modest discount of 15% or less, relative to 2019 levels. Only 12 % of respondents are hoping for a discount of at least 25 %.

 

  

MEDIA CONTACT

verena bauer
Verena Bauer

Head of Marketing & Communications Germany, Cluster Lead • 60313 Frankfurt am Main

RECENT NEWS

Andreas Siebert
Andreas Siebert

Andreas Siebert is the new Head of Retail Investment Germany at international real estate consultancy firm Cushman & Wakefield (C&W). 

Verena Bauer • 05/09/2022

Michael Fleck Leiter FFM Capital Market Team
Michael Fleck takes over Frankfurt investment team

International real estate consultancy firm Cushman & Wakefield has appointed Michael Fleck to lead its Frankfurt Capital Markets team. 

Verena Bauer • 23/08/2022

Office transaction in Hof FFM
Office transaction in Hof

Cushman & Wakefield has brokered the sale of an office property with 7,400 square metres of total lettable space in Hof. 

Verena Bauer • 22/08/2022

INSIGHTS

Germany Market View
Insights • Economy

Germany Real Estate Market View

A regular update on the commercial real estate market in Germany.
Helge Zahrnt • 23/09/2022
B-cities on the rise
Insights • Office

B-Cities on the rise

Innovative, solid talent pool and low rents – are the B-cities displacing the Top-7?
Verena Bauer • 22/09/2022

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Cookies.
MORE OPTIONS
AGREE AND CLOSE
These cookies ensure that our website performs as expected, for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS