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Taking Stock of Hotel Investment & Development in German-Speaking Markets culated €4.9 billion, an increase of 12 percent. But JLL only included trans- actions with an investment volume of at least €5 million, while small fry were not taken into account. The end of year spurt was particu- larly impressive. According to CBRE, roughly 43 percent of the total volume was attributable to the fourth quarter. This was mainly due to the transfer of major portfolios, not the number of transactions. The latter dropped by 29 percent compared to 2015. The run on German hotel properties was frenetic around the end of the year. Between October and December, there were 60 transactions alone—an increase of 13 percent compared to the previ- ous-year period. Among them were both prestigious deals, such as the sale of Grand Hotel Kempinski in Dresden, and strategically driven deals like the purchase of the well-located Dorint Kongresshotel in Mannheim. Surprising off-market deals included the sale of a portfolio comprising seven hotels from the Invesco Real Estate hotel fund II to Scandinavian owner/operator Pandox. ONLY FEW, BUT TOP-NOTCH PORTFOLIOS The big-volume portfolios switched owners at three-digit million amounts: the seven transactions concluded added up to €1.9 billion, analyses Thorsten Faasch, SVP of JLL Hotels & Hospitality Group in Germany; €960 million alone accrued during the fourth quarter. In total, the volume of port- folio transactions rose by 50 percent to a grand total of €2.8 billion (CBRE estimates this amount to be lower— only €2 billion. According to JLL, the Interhotel deal amounted to almost 25 percent of the volume and a joint venture between Starwood Capital and Brookfield sold nine hotels with 4,131 rooms in Eastern Germany to the French investor Foncière des Murs at an unknown price. The capital that made such mega deals possible mostly originated from foreign investors in 2016, whereas German investors were behind 65 percent of all disposals. “Asia is a growing capital market for Germany, Austria and Switzerland,” said Beike. Concretely, both CBRE and JLL iden- tified the French to be the strongest foreign group of investors. French investors put about €1.3 billion into German hotel properties, which amounts to roughly 27 percent of the entire hotel transaction volume covering German hotels, said JLL. And CBRE considers this share to be even 30 percent. According to CBRE, open real estate and special funds (€1.2 billion) were the most active buyer group followed by real estate stock companies/REITs (€1.1 billion). JLL stated that institu- tional investors were the leading investor type, followed by wealthy private individuals and private equity companies. With respect to agree- ments, lease agreements remain the most popular ones in Germany: about 80 percent of all transactions were carried out based on this type of agreement. WHERE EUROS ARE FLOWING 2016 recorded a total of 154 hotel transactions with an average deal size of approximately €33 million (+63 percent compared to 2015). “This means that on the German real estate investment market, almost one in every €10 goes into hotel property today,” said Armin Bruckmeier, Head of Corporate Hotel Brokerage Germany & CEE at CBRE in Germany. Thus, the hotel segment’s share in the total German investment volume rose from 8 to 9.7 percent within one year. “Germany is considered a safe haven in an economically and politically instable market environment. Due to these reasons, there is still a rising interest of investors in hotel property as an asset class despite constant yield pressure,” said Jan Linsin, Head of Research at CBRE in Germany, explaining the development. He identifies the constantly good perfor- mance figures in the hotel segment to be another driver of this interest. WEIGHTING OF SINGLE TRANSACTIONS VARIES There are different views concerning the weighting of single transactions. CBRE counted 112 with a total volume of €3.1 billion and an average volume of about €27 million (+25 percent compared to €22 million in 2015). JLL, however, expects a drop of single transactions by approximately 12 percent. In 2016, 69 (2015: 78) out of the 95 (2015: 101) hotel transactions were single deals with a volume of just over €2 billion. The five-star Hyatt Regency Dues- seldorf was among the largest single transactions in 2016 as it was sold to Primeotel Europe, a European hotel fund, and Algonquin for more than €100 million in the third quarter. The sale of the 386-room Nikko Hotel Duesseldorf by the British Benson Elliott investment company to Art-In- vest was another major transaction. Moreover, Maritim Hotel Dresden went from Internos Global Investors to Frasers Hospitality Trust for €58.4 million. 2 HOSPITALITY INSIDE | IHIFPDF Image | Burgenstock Taking Stock of Hotel Investment
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