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However, the total investment in the European hotel real estate dropped by 6.7% yoy and amounted to 23.3 billion Euro in the third quarter of 2019, says the latest report by CBRE.

«Despite the overall decline in investment in European hospitality sector, investors’ interest remains high, especially in Spain, Italy and the Netherlands. A smaller number of large transactions contributed to the reduction in investments. However, we are seeing increased interest in resort markets, they are attractive to conservative investors», — said Paul Kapiris, Director of international investment in hotel real estate CBRE.

The UK remains Europe’s largest hotel market. It accounted for 27 % of investments in the European region for the year. However, the investment volume decreased by 12.1% to 6.2 billion euros. Accor’s HotelInvest has acquired the Novotel and Ibis Blackfriars in London. However, experts noted that more large deals in the UK over the past year was not.

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Germany regained the second place on investments in the hotel sector. However, the volume of deals decreased by 18.2% to 3.4 billion euros. In the third quarter Swedish hotel Fund AB Pandox acquired three hotel HR Group in the cities of Augsburg, Erfurt and Dortmund.

Italy took third place for investments in hotels among European countries. The volume of investments in the hotel sector in Italy increased by an impressive 72.9% in annual terms and reached 2.9 billion euros. This was facilitated by a deal with a hotel company Belmond and the acquisition of the American company Oaktree portfolio of 15 hotels in the second quarter. Forward sale NH CityLife in Milan means higher level of liquidity in the market. Active institutional investors, such as Invesco RE and AXA IM, contribute to the transition of the Italian hotel market from opportunistic to the core, experts say.

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In France in the third quarter closed fifteen deals in the hospitality sector. The volume of investments in the hotel market grew by 47 % year on year and reached 2.6 billion euros. The largest deal was the sale of the Novotel Paris Centre Gare Montparnasse. Among the international investors to invest in the French hotel — Benson Elliot Capital Partners, Schroder Real Estate Hotels and KSL Capital Partners.

According to the report, the profitability of hotels in the city center decreases, so investors are increasingly considering investment in resort hotels as a stable alternative. Two well-known Italian resort sold this year — the Capri Palace for 105 million euros company Dubai Holding (Jumeirah) and the hotel Le Ginestre for 32 million euros, the company Enma Capital.

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Source: CBRE

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