Activity on the German hotel investment market remained strong going into 2017. According to Colliers International, Q1 2017 saw a new record high in the wake of 2016’s excellent end-of-year results, topping the results posted in Q1 2016 by 45% with a transaction volume of over €1.0bn.
According to Andreas Erben, “Similar to the activity we have seen in past quarters, investors showed particular interest in deals involving single hotel assets in the first three months of 2017. This asset type changed hands for €780m, accounting for 75% of total transaction volume and coming in strong ahead of portfolio deals, which posted just shy of €270m due to limited supply. Hamburg saw the highest-volume deal with the purchase of the Azure Group’s Radisson Blu 4-star superior hotel by a Norwegian family-run company.”
GERMAN INVESTOR ACTIVITY REMAINS HIGH
Activity by German and international buyers equalized considerably compared to 2016. Although German investors were again the more active of the two, accounting for just over €600m (58%), their share in total transaction volume dipped yoy by 29 percentage points.
Foreign investors, however, took the lead sell-side, accounting for slightly more than €560m and boosting their share of total transaction volume 47 percentage points yoy to 55%.
4-STAR HOTELS HEAD INVESTOR LISTS
Just like last year, investment activity continued to revolve primarily around 4-star hotels with this hotel category bringing in 63% of total transaction volume in Q1 2017 (€650m), up 10 percentage points yoy. 3-star hotels trailed at some distance to claim second place, accounting for just shy of €240m, or 23% of total transaction volume. 1 and 2-star hotels followed with a 9% share, down only 2 percentage points from previous year results. Investors poured just under €60m into boarding houses, with no deals signed for 5-star hotels in the first three months of the year.
- Transaction volume up 45% yoy
- Single deals dominate market activity
- German investor activity remains high-4-star hotels head investor lists
- Asset/fund managers strongest player buy-side
- Outlook: With a remarkable start, 2017 could replicate 2016’s record results