German hotel market: Transaction volume of 750 million euros in the first quarter of 2016
Overall volume up 30% in a year-on-year comparison
Single transactions dominate the first quarter of 2016
Property development disposals becoming a focus
In the first quarter of 2016, the hotel transaction volume in Germany that came in at € 750 million significantly outperformed the prior-year period, up 30% from € 575 million. This is the conclusion of a current analysis prepared by the commercial real estate services company CBRE.
Focus on single transactions
In contrast to the first quarter of 2015 when portfolio deals predominated, single transactions contributed almost exclusively to the notable increase in the transaction volume in the first quarter of 2016. Of the 30 registered hotel transactions, only the Novotel, situated in central Berlin with 238 rooms, was acquired by Foncière des Régions as part of a mixed-use portfolio that also comprised 117 apartments, as well as office and retail space of 10,700 square meters. A pure hotel portfolio transaction was not registered in the first quarter. The sale of the five-star hotel Rocco Forte Villa Kennedy in Frankfurt with 163 rooms, acquired by the GEG German State Group from Commerz Real, featured among the largest single transactions. In addition, BNP Paribas Real Estate Investment Management acquired the Radisson Blu Hotel Hannover from HGA Capital.
The lack of portfolio transactions in the hotel sector makes the high transaction volume in the first quarter even more meaningful and indicates a more sustainable recovery in the market.
Acquisition of eleven property developments
In the first quarter of 2016 investors focused on hotel developments in particular. All in all, eleven hotel developments were acquired in the first quarter, including the two developments Hyatt Place Frankfurt Airport and Holiday Inn Gateway Gardens that together increase the capacity around Frankfurt’s airport by a total of 600 rooms. Hansainvest purchased the Holiday Inn Gateway Gardens development for € 45 million in the context of a share deal. Union Investment took over the Hyatt Place development for its UniImmo: Global real estate mutual fund at an undisclosed price. Moreover, four more hotel developments were sold in Hamburg and Freiburg. Patrizia Immobilien AG purchased the Hampton by Hilton and Super 8 Freiburg Gare du Nord comprising 380 rooms in total for € 42 million. The sellers are two property companies of Hamburg-based Revitalis Real Estate and the Dereco Family Office from Cologne. Patrizia also acquired the Pier 3 HafenCity in Hamburg’s Überseequartier. The three-star superior hotel will have 212 rooms. In addition, the Unmüssig Group sold the Number One hotel development in Freiburg for € 28 million to Allgemeine Rentenanstalt Pensionskasse AG that belongs to Württembergische Lebensversicherung. Motel One will be the
Thanks to the positive outlook for the German hotel market and, compared with other real estate classes, the higher yield of currently 5% for prime properties in the prime segment, institutional buyer groups targeted brand hotels with long-term leases in the first quarter, particularly in the budget segment.
German investors predominate
Open-ended Funds/Special Funds and Asset Managers/Fund Managers were particularly active in the first quarter. Both buyer groups together contributed almost 60% of the measured transaction volume. “This is proof of the ongoing strong financial clout of investment companies, as well as the increasing attractiveness of hotels as an asset class”, states Kaussen. At around 90% measured by the overall transaction volume, buyers in the first three months were almost exclusively German investors, even though international demand for German hotel properties remains persistently high. “There are a number of single assets and hotel portfolios currently up for sale that in our opinion will be of great interest to international investors. We therefore assume that the share of international investors is set to increase significantly over the course of the year despite fierce competition for Core products”, comments Bruckmeier.
Head of Hotels Germany & CEE
+49 (0)89 24 20 60 25
Head of Corporate Hotel Brokerage Germany & CEE
+49 89 24 20 60 44
Dr. Jan Linsin
Head of Research Germany
+49 69 17 00 77 663
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