In the first half of 2023, around 369 million euros were invested in hotel properties in Germany. According to Colliers, this is the lowest result since 2012.
In the months April to June, only around 128 million euros were invested. The hotel investment market thus follows the development of the overall market, as Colliers reports. The share of the hotel asset class in the entire commercial investment market is four percent, as in the past years.
According to René Schappner, Head of Hotel at Colliers, the weak half-year result comes as little surprise. Because at the end of last year as well as at the beginning of this year, little product was put on the market that could have led to transactions in the first half of the year. "Due to the volatile and uncertain market environment, especially with regard to interest rate and price uncertainty, many owners postponed their sales plans or did not initiate them at all."
The purchase of the 185-room Steigenberger Hotel de Saxe in Dresden by Commerz Real's open-ended real estate fund Hausinvest: the seller Aroundtown had acquired the property through the takeover of TLG in 2020. The hotel is let long-term to Deutsche Hospitality.
The sale of the 120-room Steigenberger Grandhotel on the Baltic island of Usedom to Union Investment's open-ended mutual property fund Immofonds 1: The seller and lessee is Resort Hotel Kaiserbad GmbH & Co. KG. The newly concluded lease has a term of 20 years. The hotel will be extensively renovated and expanded by ten rooms over the coming years.
The sale of the Seehotel Fleesensee (156 rooms) in the middle of the Mecklenburg Lake District to Privathotels Dr. Lohbeck GmbH: The seller was Lloyd Fonds Am Alten Kalkwerk Fleesensee GmbH. Until June of this year, the hotel operated under the "Tui Blue" brand.
The sale of the 90-unit Stayery serviced flat in Bochum for 10.5 million euros to the Catella Wohnen Europa (CWE) fund: The seller is the developer Kreer Development. The property is scheduled for completion by mid-2024.
The trend towards riskier investments in the hotel asset class continues, according to Colliers. In the year to date, value-add and opportunistic transactions accounted for 34 per cent of the transaction volume. In 2022 as a whole, the share was just under 21 per cent, in 2021 it was around 14 per cent.
Schappner classifies: "Hotel businesses are currently performing well. Occupancy rates are very good and the increased costs have been successfully passed on through higher room rates. In short: The economic situation of many operators is good and original fears that there could be distortions on the operator side are not coming true. Accordingly, many operators and hotel brands continue to expand. This currently creates opportunities for investors in operator-free properties or properties with expiring operator contracts, as these are particularly attractive, especially due to the ongoing positive development of room rates."
Colliers is currently observing that an increasing number of individual properties as well as portfolios are being offered both in processes and off-market. More are currently being prepared, as the price corrections are coming to an end, thus increasing planning security. Accordingly, the real estate experts expect increased market activity after the holiday season.
However, it remains questionable whether the processes that will start in the second half of the year can be concluded this year. Transactions would still take longer than before the Corona pandemic. "Accordingly, we do not expect the one billion euro transaction volume mark to be broken this year. The outlook for 2024 is positive. Then it can be assumed that there will be more activity on the part of core investors again if, as expected, purchase prices have finally stabilised at the new level," Schappner summarises.
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