Germany Becomes Star Performer for European Hotel Transactions as Investors Play It Cool in Year of Change, Says HVS Report
March 1, 2017 12:08pm
1 March 2017, London: Hotel transaction volume across Europe reached €17.8 billion in 2016, down 25% on the previous year’s record volume, according to the annual European Hotel Transactions report, published this week by HVS and its brokerage and investment services division HVS Hodges Ward Elliott.
While portfolio activity halved to €7.2 billion-worth of sales, single asset transactions remained strong with volumes of €10.6 billion, up almost 17% year-on-year.
“Last year’s fall in portfolio hotel transactions came as no surprise, particularly as it followed an extremely active 2015 during which there were €14.6 billion-worth of portfolio transactions,” commented report co-author Friederike von Bünau, associate, HVS London.
“Many investors sat tight last year as the world experienced a number of political and societal changes, although an appetite remained for single asset acquisitions.”
Germany’s hotels were the star performers during 2016 with transaction volumes reaching €4.4 billion, including €2.45 billion-worth of portfolio assets, a 30% rise on 2015. Single asset transactions in Germany valued €1.95 billion with key deals being the sale of the Hyatt Regency Dusseldorf to Algonquin and Aviva France’s Primotel Europe fund and the sale of the Grand Hotel Taschenbergpalais Kempinski in Dresden.
Despite a 70% fall in transaction levels the UK was still the second best performer in Europe. Of its total volume of €3.6 billion, €2.1 billion were single asset transactions. Portfolio transactions fell 83% year-on-year to €1.5 billion (£1.2 billion).
London maintains its position as the leading European hotel transaction market, with a total volume of €1.8 billon. The fact sterling lost 10% of its value between 2015-16 is thought to have affected acquisition decisions throughout the year, as well as weakening the UK’s year-end ranking.
Transaction volume in France increased in 2016, up from €1.5 billion to €1.9 billion. Single asset transactions showed a 130% growth year-on-year, although operating performance continues to struggle in Paris and Nice.
In Spain market fundamentals continued to strengthen last year with the country showing a 12% increase in transaction activity to €2.1 billion. Ireland and Austria also showed a rise in transaction activity in 2016.
The majority (83%) of total investment volume was acquired by European players, totalling €14.8 billion of acquisitions (up from last year’s 40%). The market saw a large fall in North American, Middle Eastern, and Asian investors’ investments, by about 88%, 70% and 61% respectively, and, of the €980 million of Asian inflow, almost 40% was invested in London.
“The new normal, in a period of political uncertainty, Brexit and low interest rates seems to be a race for fixed income hotel assets, as a variety of investors reach to hotels as an alternative in the search for yield, “ concluded report co-author Peter Szabo, analyst, HVS London.
“Despite the lack of stock, appetite for hotel assets will likely be strong in 2017 until interest rates turn and pricing levels adjust across the spectrum.”
Download a copy of 2016 European Hotel Transactions by Friederike von Bünau and Peter Szabo at http://www.hvs.com/article/7951/2016-european-hotel-transactions/?campaign=email
european hotel transactions,
friederike von bünau,
HVS, the world’s leading consulting and services organization focused on the hotel, mixed-use, shared ownership, gaming, and leisure industries, was established in 1980. The company performs 4,500+ assignments each year for hotel and real estate owners, operators, investors, banks and developers worldwide. HVS principals are regarded as the leading experts in their respective regions of the globe. Through a network of some 35 offices and more than 350 professionals, HVS provides an unparalleled range of complementary services for the hospitality industry. HVS.com
Superior results through unrivalled hospitality intelligence. Everywhere
Contact: Linda Pettit
+44 13 4283 2866
Contact: Friederike von Bünau
+44 (0) 20 7878 7773
Contact: Peter Szabo
+44 (0) 20 7878 7774
Contact: Russell Kett, Chairman
+44 (0) 20 7878 7701
Hotel Market Update on Taiwan
HVS Market Pulse: Silicon Valley
2016/17 United States Hotel Franchise Fee Guide
In Focus: Ibiza, Spain
2017 HVS Lodging Tax Report - USA
Value of African Hotel Markets Increased in 2016
Hotel Investment Less of a Risky Business Now
The HVS Quarterly Hong Kong and Macau Update
Top 6 Hotel Success Factors
HVS Market Pulse: Boise, Idaho
UK Sees Record Level of Room Openings as Q2 2017 Reports Strong Results for Hotel Sector
Market Pulse: Bermuda, the Host Island for CHICOS 2017
The Evolving Workplace
Social Media Marketing in the Hotel Industry: Trends and Opportunities in 2017
The Serviced Apartment Sector In Europe: No Longer the Underdog?
Outlook for Tourism in Israel Strong as Three Million Mark Within Sight, says HVS Report
Serviced Apartment Operators Embrace Growth as They Dare to Be Different, Says HVS Report
Key Drivers for Hotel and Resort Spa Profitability
HVS Releases the 2017 Hotel Cost Estimating Guide
HVS Key Takeaways: 2017 NYU International Hospitality Industry Investment Conference
Please login or register to post a comment.