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Germany could overtake UK in hotel investment volumes

Germany could overtake UK in hotel investment volumes

June 2016

Germany is fast becoming the most attractive market in Europe offering consistently high levels of liquidity. This following a report by CBRE which revealed that investment into European hotels totalled EUR 3.7 billion, representing the second largest deal volume recorded in any first quarter in the last decade, despite transaction volumes reducing by 30% compared to Q1 2015.

Germany achieved double digit growth (+17%) in Q1 2016 with transactions totalling EUR 750m. The growth signifies that the market could take the long-standing mantle from the UK, which has dominated the investment volumes in the last decade.

The UK’s hotel transaction turnover declined by 58% in Q1 y-o-y, as Brexit’s impact on the UK hotel investment market left some investors waiting to see the outcome of the impending referendum. Despite this, many players have remained active and have attempted to capitalise on potentially less competitive sales process.

During a record year for hotel investment in 2015, the asset class grew its share of total European real estate investment to 8%. Q1 2016 figures show that hotels have retained the 8% share and levels of liquidity relative to other sectors has not abated.

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