Investment into Dutch hotels reached a record €1.8 bn in 2017, a year-on-year increase of 200%, according to international real estate advisor Savills.
Savills attributes the record investment volume to several factors, including the rapidly increasing number of tourists visiting the Netherlands.
'Where the Dutch hotel market used to be dominated by a number of specialised players, new investors are entering the market now, seeking to diversify product and income within their portfolios,' said Bas Wilberts, head of alternative investments at Savills Netherlands.
Data collected by Savills reveal that one third of all investments in 2017 came from Germany, with about a quarter of investment volumes coming from Asian investors, while the share of domestic buyers was relatively low.
According to the report, the number of tourists continues to outstrip supply despite new developments which have led to a considerable increase of hotel rooms. This is causing room rates and revenues to rise, making hotel investments more appealing.
'Amsterdam is extremely popular with tourists, accounting for almost half of the foreign visitors to the Netherlands. This high demand is reflected in the room rates and RevPAR of Amsterdam hotel rooms, which are the highest of the Netherlands and in the top 10 in Europe,' added Wilberts.
'Naturally, the number of developments and investment volumes are therefore also highest in the Amsterdam area, where approximately 4,000 rooms will enter the market in 2018, and an additional total of 3,000 rooms are expected until 2020.'
As new hotel developments continue to be outpaced by the Dutch tourism industry, hotel investment fundamentals like turnover growth and compressing yields will continue to strenghten during the course of 2018, the report says. 2018 is tipped by Savills as another good year for hotels in the Netherlands, with the market again likely to be dominated by cross-border investments.
Key deals already registered this year include the acquisiton by First Sponsor, the Singapore-listed property group, of the five-star Hilton Rotterdam for a deal volume of €51 mln, equating to €201,000 per room.
