CEE hotel markets begin to stir

The sale of a luxury hotel in Warsaw in early December supports the widely held view that an increase in the trading of hospitality assets is on the cards for Central and Eastern Europe in 2014.

A consortium of international private investors acquired the 206-room Luxury Collection Hotel Bristol in Warsaw in a transaction reported on 6 December. The buyers are said to have 'existing luxury hotel interests'.

The financial details of the transaction were not disclosed but real estate publication Eurobuild reported that the hotel was acquired by Rosmarinum Investments in 2011 for €19.5 mln from the Orbis group. The property, operated by Starwood Hotels and Resorts, underwent a €13 mln refurbishment and was rebranded to Luxury Collection in 2013.

The sale was conducted by Jones Lang LaSalle Hotels & Hospitality, and the adviser believes more deals are in the offing. Christoph Härle, CEO for Continental Europe at Jones Lang LaSalle Hotels & Hospitality Group, said: 'This deal underlines the strong investor appetite we are currently seeing for hotels in Central and Eastern Europe. We are confident that the transaction markets will continue to develop positively in the coming years in Poland, one of the most vibrant economies in Europe.'

The Hotel Bristol is a trophy asset prominently located adjacent to Warsaw’s Presidential Palace and a few minutes from the legendary Old Town and the main tourist and business districts of Warsaw.

Both Harle and Dominic Murray, director of brokerage EMEA at CBRE, say more deals are on the way in Poland and other CEE markets. Murray: 'We are also beginning to see trades in CEE, and I would expect more activity in Poland and the Czech Republic. Poland in particular is perceived as a good market.'

The largest hotel investment in Warsaw prior to Hotel Bristol was Deka Immobilien's acquisition of the InterContinental from Warimpex and UBM in December 2012. The investment volume of €103 mln made it the largest hotel in the Warsaw capital in decades.

See the hotel feature in the December edition of PropertyEU Magazine