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Germany: Hotel Investment Q1 2021

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Market at a glance

The German hotel investment market generated just under €493m in transaction volume in the past three months, down almost 52% from the previous year’s excellent results and 14% shy of the 10-year average. High-quality properties in excellent locations with strong-covenant tenants and ideally high flexibility in terms of usage remain quite popular. Significant price reductions are otherwise to be expected in most cases. With the future of many hotels currently on the line, investors are increasingly on the lookout for assets with high conversion potential. Conversions for healthcare use are an attractive option in some cases. DIC Asset AG’s sale of Villa Kennedy in Frankfurt to Conren Land for roughly €95m was the largest deal signed in Q1 2021. The property will be converted into a care facility. An increasing number of smaller, owner-run hotels went out of business in Q1 2021. Consolidations are quite common in this sector at the moment. German investors tended to dominate market activity in Q1, accounting for 82% of invested capital. Transaction activity primarily revolved around the 4-star segment. The relatively high market share generated by 5-star hotels can be exclusively traced back to the high-priced sale of Villa Kennedy. Serviced apartments recorded a slightly weaker result compared to previous quarters. Yields remain stable. However, this information is based on a limited number of transactions.

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Germany: Hotel Investment Q1 2021

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Susanne Kiese

Head of Market Intelligence & Foresight | Düsseldorf


Susanne joined Colliers International Holding GmbH in February 2016 as Head of Research Germany. Before, she worked as a Senior Research Analyst for Hypothekenbank Frankfurt / Eurohypo, a specialist bank for real estate and public finance for almost 12 years. Susanne was also Research Analyst with Deutsche Gesellschaft für Offene Immobilienfonds (DEGI) GmbH, the property related investment company of Allianz Dresdner Property Group (now part of Aberdeen). 

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