Europe: Hotel transaction data from Cushman & Wakefield reveals the first half of 2020 saw an increase in investors retreating to their home regions, with 78 per cent of the recorded €5.7 billion originating from within Europe.
Around 79 per cent of the deal volume was agreed before the Covid outbreak, with a total of €1.2 billion agreed afterwards.
Examples of key transactions include the acquisition of the 136-key Ritz London by a Qatari investor, and the purchase of a 304-room nhow hotel in Berlin by Swiss-listed Eastern Property Holdings.
The UK remained the highest volume market for hotel investment in H1 2020, followed by Germany which recorded €0.9 billion in transaction volume. Germany was also the most active market with the highest number of properties and rooms sold.
Spain was one of the few countries to record investment volume growth up by 52 per cent. This can be largely attributed to the notable acquisition of the Madrid EDITION hotel for €220 million by Archer Hotel Capital, from KKH Property Investors.
The most active buyers during the last six months were institutional investors, which accounted for 48 per cent of the total volume transacted.
The average price per room increased by 26 per cent to €239,000, compared to €189,000 per room in 2019. Focus has been on prime asset in core locations, and where there is less concern about the impact of Covid-19 on long term real estate values.
Jonathan Hubbard, head of hospitality EMEA at Cushman & Wakefield, commented: “The hotel sector across Europe has been hit hard by COVID-19 lockdowns, which have understandably resulted in a sharp drop in investment volumes as investors take stock and await signs of a trading recovery. However, investor sentiment for the sector remains positive for the medium term and the transactions that have occurred demonstrate this confidence. Nonetheless, with a very uncertain trading outlook in the short term, many well capitalised investors are holding out for pricing adjustments or some distressed sellers to unlock more upside in their acquisitions and this is likely to be a feature of the market in H2 2020.”