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Increased investor interest boosts European hotel deals by 86%

24 February 2015 by
Increased investor interest boosts European hotel deals by 86%

Further evidence that the UK continues to be the star performer in the hotel real estate market in Europe is highlighted in new research from hotel consultant HVS.

The European Hotel Transactions report records that the volume of transactions across the continent increased to £10.5b last year, up 86% on 2013 - a new record since the onset of the global financial crisis.

The UK was Europe's most active hotel real estate market, followed by Germany, then France, with these three markets accounting for 59% of total European transactions during 2014. The number of hotels that changed hands grew faster than property transactions in all other sectors including office, industrial and retail.

Jill Barthel, analyst and co-author of the report, HVS London, said: "Demand for prime assets across Europe's key gateway cities is still very strong. Prices in capital cities such as London and Paris are very high, prompting investors to increasingly consider secondary and tertiary investment locations, particularly in the UK."

Single asset hotel transactions in Europe last year were the highest on record, 72% higher than in 2013, with the deals in the UK worth £1.8b, up 40% year-on-year. Significant deals included the sale of the London Edition to ADIA and Strategic Hotels & Resort's sale of the Marriott Hotel Grosvenor Square for £111m to Hong Kong-based Joint Treasure International.

Portfolio transaction volume across Europe amounted to £5b, accounting for 48% of total investment. This result was helped significantly by the largest deal of 2014, the Shanghai-based Jin Jiang's acquisition of the 90,000-room Louvre Hotels Group from Starwood Capital for £800m.

Positive outlook for hotel transactions following 17.2% increase in prices >>

Savills predicts regional hotel transactions to top £2b in 2014 >>

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