A growing number of hotel bookings, an increasing occupancy rate and a high average daily rate, is leading to a positive investment climate for hotel real estate in the Netherlands. With 1 billion euros of hotels sold in the first ten months of the year, the interest in the hotel industry seems greater than ever before. This year, the average transaction price per room increased to € 225,000, a 70% increase compared to 2016. In Amsterdam the price amounted to € 427,000, an increase of nearly 150%.
Most of the transactions took place in Amsterdam. The capital accounted for 45% of rooms sold. Other cities are also gaining popularity amongst investors. The wider spread of tourists results into higher revenues for hotels outside of Amsterdam. For example, hotels in the Schiphol region saw their revenue increase by 15% in the first ten months of 2017.
The growing amount of travelers in the world continues to shape the hotel industry towards a distinctive real estate sector, also in the Netherlands. This stimulates professionalization amongst investors, who are expanding their focus onto hotels.
"The scarcity in Amsterdam is increasing due to the hotel stop imposed by the local council. The result is a steep rise of hotel property values”, says Dirk Bakker, Head of EMEA Hotels. "Investors are currently broadening their horizon and looking for opportunities in other regions. When looking at the portfolios sold this year we see that a large percentage of the hotels are located outside of Amsterdam".
Due to the record volume of transactions the initial yields in Amsterdam have declined to a historically low level, with even outliers below 4%. Our expectation is that the initial yields will decline in other cities as well.
Reports per sector
- Dutch real estate market - general
- Industrial & Logistics