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Taking Stock of Hotel Investment & Development in German-Speaking Markets CITIES: TOP 5 LOSE TO SECONDARY LOCATIONS Investors are still very interested in Germany’s top five cities: Berlin, Duesseldorf, Frankfurt, Hamburg and Munich. However, according to CBRE, they experienced a decrease by 12 percent to 47 percent despite the increasing volume of the entire year compared to investments at secondary locations, which have been rated as attractive investment opportunities by investors. At the same time, the resort hotel industry is gaining in importance, too. With a transaction volume of about €696 million, Berlin surpassed Frankfurt and Duesseldorf with €651 and €376 million, respectively. Berlin’s passing maneuver concerning transactions simply relates to the fact that hotels in Berlin were more often part of portfolio transactions than hotels in Munich, for example. In Munich, nobody wants to sell properties, real estate is rare and the demand is high. The Bavarian provincial capital remains “the most wanted investment city”. As such, the rents will continue to increase. Hamburg is waiting for the realization of a large project pipeline, but also enjoys high demand, certainly increased by the opening of the Elbphilharmonie concert hall, in January 2017. This year, another new luxury hotel in Hamburg will open: The Fontenay, a €100-million project financed by the logistics billionaire Klaus-Michael Kuehne on the ground of the former InterContinental Hotel. Duesseldorf, however, will remain depen- dent on strong or weak trade show years, but will spread out to Cologne, too. Frankfurt might profit from company and business relocations from London after the Brexit, but continues to develop independently concerning hotels, especially at Rhein-Main-Air- port and in the east of the city, where Frankfurt and Offenbach are slowly growing together. STRONG PERFORMANCE The market analyst Fairmas from Berlin is not concerned about the German market when looking at the performance develop- ment of the hotel industry in 2016 in comparison to 2015. “As is well known, the German hotel market is under the strong influence of trade shows and congresses. Whether Munich, Frankfurt, Cologne, Duesseldorf, Stuttgart, Nuremberg, Dortmund, or Hanover or an event like DRUPA (a trade show for print and cross media solutions) in Duesseldorf is able to more than triple the customary RevPAR for two weeks,” 3 said Fairmas Managing Director Niels Schroeder. “For most trade show destinations, 2016 was a good trade show year. Therefore, locations such as Duesseldorf, Stutt- gart, Dortmund, Bremen, Nuremberg and Leipzig were even able to increase their RevPAR by double-digit figures in comparison to the previous year. As many important trade shows only take place every two to three years, a reverse development is to be expected at many locations in 2017. Therefore, 2015 was a very good trade show year in Frankfurt and Cologne; in 2016, the RevPAR decreased by 2.5 and 2.7 percent respectively, as expected.” “Apart from the trade shows, a resilient economy supports the segment of business travels, and the higher readi- ness to consume increased the demand for short travels and city trips. In addition, the geo-political situation fuels HOSPITALITY INSIDE | IHIFPDF Image | Burgenstock Taking Stock of Hotel Investment
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