Transaction volume on the German hotel investment market in the first 3 months came to €1.03bn, up 71% yoy and just one percentage point shy of 2017’s record result. Q1’s impressive performance can mainly be attributed to investment in property companies and an uptick in portfolio deals. Portfolios generated over €600m and a market share of 59%. The acquisition of the TLG portfolio in the wake of the Aroundtown amalgamation was the largest portfolio transaction posted in Q1. The deal included the sale of several hotels in Germany. In contrast to this lively interest in portfolio deals, single asset transactions saw more moderate activity. High volume single asset deals were few and far between compared to previous years. German investors took a dominant market position. They accounted for a total of 75% of transaction volume buy side and 94% on the sell side. Transaction volume was evenly spread between locations within and outside of the TOP 7. The growing trend towards investment in 3 and 4 star hotels that we have seen in the past few quarters continued in Q1. Hotel investors remain cautious as the shutdown due to the corona pandemic leads to massive losses in revenue for hotels . According to a current Colliers survey , 17% of surveyed investors express an interest in hotel assets . Increases in rents or purchase prices are not expected . We expect subdued investment activity in the coming months, which will most likely be reflected in transaction volumes as of Q2. It is too early for reliable forecasts, but perhaps we will even see interesting new investment opportunities.
