Germany has had its most active first quarter since records began for hotel investment volumes, according to new research by global advisor CBRE.
A total of €1.15 bn was transacted in the first three months of 2017 in Germany, representing an increase of 55% year-on-year.
'The German market sees an increasing appetite for the forward purchase of hotel projects, indicating that investors are increasingly willing to take the risk on projects in order to secure prime locations in advance,' commented Armin Bruckmeier, head of investment properties Germany & CEE, CBRE Hotels, Germany.
European deals down 14%
Overall, European hotel investment activity in Q1 2017 totalled €3.82 bn, down 14% year-on-year. However, in addition to Germany, Spain and Italy also bucked the trend and recorded growth. Italy saw deals amounting to €229 mln, an increase of 48%, while Spain recorded €564 mln of deals, reflecting an increase of 24%.
'Most European markets see hotel cap rates at a three-year low, suggesting strong investment appetite in the sector. However, a shortage of stock in the highly sought after markets is likely to remain a limiting factor to increasing transaction volumes in the months ahead,' concluded Catherine Latzenhofer, analyst, CBRE Hotels, EMEA.
The record deal volume follows a strong performance at the end of last year, when €2.19 bn of sales were registered in the fourth quarter of 2016.
