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2 March 2018, London: European hotel transaction volume reached €21.7 billion in 2017, up 22% on 2016 and the second largest figure ever recorded, according to the annual European Hotel Transactions report published this week by HVS and its brokerage and investment services division HVS Hodges Ward Elliott.

Single asset transactions in Europe were up 16% year-on-year to a volume of €12.4 billion, continuing an upward trend and accounting for 57% of transaction volume, with some 323 hotels – 59,500 rooms - sold in 2017 for over €7.5 million.

Portfolio volume showed a 29% increase in activity to €9.3 billion with Spain accounting for the majority of interest - 36% - with nearly 30,0000 rooms sold in the country in 2017 across 14 portfolios, reflecting growing investor interest for Southern Europe.

“A year of strong RevPAR growth across most of Europe was reflected in transaction levels, particularly in London, Amsterdam, Barcelona and Madrid,” commented report co-author Peter Szabo, associate at HVS Hodges Ward Elliott.
“Other secondary markets such as capital cities in the CEE and Southern European resorts also enjoyed increased investor interest as hotel performance saw big improvements.”

The UK regained its leading role in transaction activity with sales volumes accounting for 25% of total activity reaching a value of €5.4 billion, up from €3.6 billion in 2016. Single asset sales saw values of €3 billion, while portfolio activity accounted for €2.4 billion, despite ongoing political uncertainties.

The year saw Spain experience a record year for hotel transactions, accounting for 23% of total activity and doubling 2016 results with sales valuing €5 billion.

Transactions in Germany saw a slowdown in 2017 after a record year in 2016, with portfolio sales down 38% to a value of €1.5 billion. However, single asset sales saw an increase, with Munich and Berlin proving particularly popular with investors.

London was once again the leading European hotel transaction market, with a total volume of some €2.5 billion, ahead of Amsterdam at €1.3 billion. The year saw Paris fall to third place in the table, with €777 million-worth of transactions. Madrid and Barcelona recorded a combined transaction volume of €1.1 billion.

“Stability in both exchange rates and interest rates and the availability of hotel stock has helped Europe become popular amongst hotel investors, particularly private equity investors from North America,” commented report co-author Magalí Castells, associate, HVS.

“As we move into 2018 key factors that will influence the transaction market will be interest rates and staffing pressures. As stock becomes scarce in primary markets developers and investors will be increasingly looking at secondary markets such as Southern Europe or the CEE.”

About HVS

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.

Superior results through unrivalled hospitality intelligence. Everywhere

Contact: Linda Pettit / +44 13 4283 2866

Contact: Peter Szabo / +44 (0) 20 7878 7774

Contact: Magalí Castells / +44 (0) 20 7878 7710

Contact: Charles Human / +44 (0) 207 878 7771

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