European hotel transactions reach ‘record high’ in 2019

Total European hotel transaction volume has reached the highest annual level ever recorded last year with €27.1bn (£23.6bn) worth of deals “being struck”.

According to the annual European Hotel Transactions report published this week by HVS and brokerage and investment services division HVS Hodges Ward Elliott, the largest amount of capital was poured into the UK during the year, reaching almost €5.3bn (£4.4bn) in investments.

German destinations booked the second most investment volumes at just over €4bn (£3.48bn), 18% of total volumes and up by 6% on 2018.

In regards to room count, Germany transacted 21% of all hotel rooms and 18% of all hotels while the UK came second with 20% of all hotel rooms and 22% of the total number of hotels.

Co-author of the report and analyst Shaffer Patrick said: “Record low interest rates amongst various European countries and continuing yield compression in key markets have helped to drive large investment volumes compared to previous years.” 

“Asian investors have deployed 84% more capital in 2019 than in 2018, with a dominating presence from Chinese, Singaporean and South Korean investment firms and sovereign wealth funds.”

He added: “These factors, combined with the comparative affordability due to a weakening of the euro and sterling on account of Brexit have made Europe an even more sought-after hotel investment market”

 With a total of 844 hotels and some 132,000 rooms changing hands, 318 hotels were single asset transactions and 526 hotels were sold as part of portfolio deals.

London remained the leading European hotel transaction market with a total volume of around €2.2bn (£1.8bn) in 2019, ahead of Amsterdam at €1.1bn (£956m).

Vienna saw an investment increase of 641% to €709m (£617m) in the previous year, following relatively “little activity” in 2018.