According to Colliers, the most liquid market continues to be the UK with €2.1bn of hotels transacted, followed France with €1.6bn and Germany with €773 million, following major acquisitions by Qatar Holdings of the Park Lane Hotel for €356m and the Concorde Lafayette Hotel in Paris for €466m. The most dominant buyers of hotel real estate were institutional investors, which increased their share in the total hotel investments from an average of 39% in the last five years to 50% in 2013. 

Investors were also very active in Amsterdam, Munich, Frankfurt and Vienna, with €744 million invested in German hotels so far this year. This was boosted by the acquisition of the Queen Moat Portfolio by Fattal Group of €285 million in Germany in the first quarter of 2013. 

Dirk Bakker, Head of Colliers International’s Hotels team in the Netherlands, said: “Investors are primarily concentrated on prime assets in core markets subject to relatively stable economic conditions in Western Europe. In addition to the UK, France and Germany, Amsterdam is becoming more en vogue due to an over stressed market in Paris and London. In contrast to the rest of Eastern Europe, Poland was deemed one of the most promising countries for investors. The total transactional volume in 2013 will most likely outperform 2012.”

The investors surveyed are actively looking to expand their portfolios in EMEA in 2014, with a focus on development opportunities.  Recycling capital was their main motivation for disposing hotel assets. The results of the report show that most investors believe that capitalisation rates will remain stable over the coming 12 months, only a few investors expecting improvement. 

Dirk Bakker, continued, “Due to the introduction of Basel III and the lack of economic growth, it comes as no surprise that obtaining financing for hotel real estate investments has become even more difficult, resulting in LTV’s often no higher than 60 per cent. With the types of lenders in the hotel sector linked to market conditions, this has resulted in a change of investor profiles, with a shift in the EMEA region towards institutional parties.”