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European hotel investment surpasses €14b in 2017

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European hotel investment surpasses €14b in 2017

Hotel transaction volumes have exceeded €14b (£12.4b) on the year to date, with the UK remaining one of the largest markets.

Total European hotel investment volumes increased by 33% year-on-year for the third quarter of 2017, contributing to a 16% year-on-year increase on the year to date, according to global real estate adviser CBRE.

The UK and Germany remained the largest markets in the first three quarters of 2017, accounting for 55% of the transaction volume. Deal volumes in both the UK and Spain – the third largest hotel investment market – are already ahead of their respective full-year 2016 volumes.

International investors continued to show strong appetite for the UK hotel sector despite ongoing political uncertainty. The UK recorded the highest investment transaction levels, which saw volumes reach €2.6b (£2.3b) in Q3 2017, up by 195% on the same period last year – although last year was impacted by the European Union Referendum.

The growth was largely driven by various high-profile hotel portfolio sales in London and the regions, including the sale of the 1,059-room Hilton London Metropole and the long-leasehold interest of the 790-room Hilton Birmingham Metropole, to Henderson Park for £500m. UK hotel yields remained mostly stable or fell marginally post-Referendum.

Paul Collins, head of hotel investment properties UK & Ireland at CBRE, said: “The UK hotel market has seen strong growth which has been supported by favourable exchange rates. Buyers have comprised of UK and international parties, which have included existing players and new entrants to the market.”

Hotel investments for 2017 set to beat last year’s figures >>

Investment into UK hotels reaches £2b in first half of 2017 >>

Overseas investors to drive UK hotel market in 2017 >>

UK named top European target for hotel investment in 2017 >>

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