Continued boom predicted for Berlin hotel market

Berlin´s attraction as a tourist destination in the growing city break segment means that the city is also becoming a magnet for domestic and foreign investors in hospitality real estate, according to a new report from Winters & Hirsch, a property consultancy based in the city. Records have been broken for annual overnight stays for the last two years running, the report says, and Berlin´s 2006 tally of 16 million overnight stays puts the city way ahead of Munich and Hamburg’s eight million each and Frankfurt’s five million.

While much of last year´s success may be put down to the World Cup, the consultancy says that turnover across the Berlin hotel industry rose by 2.1% in the first quarter of 2007 compared to the same period last year, and argues that this is a clear indication of a structural increase in demand. The report notes that hotel real estate transactions are growing along with the tourist spending, with the capital standing out from other German cities. It quotes 2006 hospitality property transaction figures of EUR 335 mln for Berlin, followed at some distance by Frankfurt (EUR 265 mln), Munich (EUR 248 mln) and Hamburg (EUR 185 mln).

Winters & Hirsch predict further growth in Berlin hotel real estate market. 'Over the next two years, we are expecting many new construction projects,' says Managing Director Philipp Tabert. 'These will go beyond the niche products seen over the last couple of years. Demand is increasing for appropriate investment property, both from domestic and foreign institutional investors as well as private investors.'