In the first three quarters of 2021, approximately EUR 1.48 billion was invested in hotel properties in Germany. Compared to the same period last year (Q1-Q3 2020: EUR 1.70 billion), this represents a decline of about 13 percent. The reason for this, according to the internationally active real estate consultancy Cushman & Wakefield (C&W), is the extremely strong Q1 2020 (Q1 2020: EUR 1 billion), which was not yet affected by the Covid-19 pandemic. Transaction activity was relatively even at around EUR 500 million per quarter. Portfolio transactions were the exception: out of 44 transactions, only three were concluded as portfolio deals. Individual property deals accounted for approximately 87 percent of transaction volume. The average transaction size was around EUR 34 million.
The largest transactions in the third quarter included:
- The sale of the 285-room Ellington Hotel Berlin to the Austrian Signa Holding. The seller was Ideal Versicherung. Operations were discontinued in September and a conversion, possibly into office or retail space, is likely to be sought here.
- The sale of a planned Intercity Hotel with 176 rooms at Lübeck's main railway station to Commerz Real for its Commerz Real Institutional European Hotel Fund. The seller is GBI and the opening is planned for 2023.
- The sale of the 309-room former Maritim Berghotel in Braunlage to Ahorn Hotels & Resorts. The seller was the Maritim Group, which had also recently sold its hotels in Timmendorfer Strand and Gelsenkirchen.
- The takeover of the Europäischer Hof Hotel in Baden-Baden, which is currently under construction, by a German pension fund. The buyer is expected to complete the luxury hotel by 2024. A lease with Steigenberger Hotels has already been signed. The sale was made out of insolvency.
- The sale of the former Holiday Inn Express Stuttgart Airport from Art-Invest to Premier Inn. After a renovation phase of several months, the 145-room hotel was reopened as Premier Inn Stuttgart Airport.
- The sale of an i Live development project with 204 serviced flats in Offenbach to AEW's open-ended core fund Eurocore. The seller and future operator is the i Live Group. The opening. under the name Rioca Hafeninsel Posto 8, is planned for spring 2024.
Stefan Giesemann, Head of Hospitality Germany & Austria at Cushman & Wakefield, commented: “Investment activity was very subdued in the third quarter with only 13 transactions, the majority of which were off-market deals and only a few properties were sold via a structured bidding process. Nevertheless, we are definitely seeing increased investor interest again. Some investors have reopened to the hotel asset class, albeit still cautiously and selectively. A larger upswing in the investment market is also hindered by the currently low number of properties being offered on the market. In addition, banks are still very restrictive when it comes to hotel financing.”
For 2021 as a whole, C&W forecasts an investment volume of around EUR 2.0 billion. This corresponds roughly to the level of last year. The consulting firm does not expect a significant recovery in the hotel investment market until the beginning of 2022.