European Hotel Investment Remains Buoyant in Q1 2019

Calle Gran Vía, Madrid, Spain - Photo by Florian Wehde on Unsplash
European Hotel Investment Remains Buoyant in Q1 2019

Investment volumes stable in 12-months to Q1 2019 at €23 billion – Investment activity driven by growth in the UK, Spain and Germany

European hotel real estate investment volumes reached €23 billion in the year to the end of Q1 2019, according to the latest research from global real estate advisor CBRE.

European hotel investment activity in the first quarter of 2019 was driven by continued growth, particularly in the UK, Spain and Germany. UK hotel investment volumes accounted for 35.5% of capital deployed in the country in the 12 months to Q1 2019, reaching €8.2 billion and reflecting a 15.1% year-on-year increase. This growth was largely a result of a particularly strong start to 2019, with Q1 up 24.5% on Q1 2018.

Spain remains Europe’s second largest hotel investment market. Deals amounted to €4.2 billion in the 12-months to Q1 2019, up 17.5% on the previous year. Germany experienced modest growth in hotel deal volumes. Over the last 12-months, investment reached €3.9bn, up 7.1% on the preceding 12 months and representing 17.0% of total European hotel investment.

Hotel investment in France amounted to €1.3 billion through the last 12-months. While this represented a decline of 6.0% year-on-year, the performance elevated France to Europe’s fourth largest market. Other notable risers include the Czech Republic (560.7%), and Switzerland (208.9%).

Paul Collins, Head of Hotel Investment Properties UK & Ireland CBRE, commented: “Following a record year for hotel investment, 2019 is off to a strong start. Growth, in key European markets such as the UK and Spain, is a testament to the strength of the hotel sector and demonstrates continued demand for alternative investments and operational real estate.”

A significant amount of investment has come from Israeli and Asian capital which is a trend that we have seen over the past 12 months and one we anticipate to continue.”

Hotel yields remained flat across the majority of European markets in the first quarter of 2019 reflecting steady investor demand.   Exceptions to this trend were in Iberia, Amsterdam and Helsinki, where an increase in investor demand resulted in falling yields for hotels operated under operational lease agreements.

Click here to download the report.