European hotel real estate investment volume declined by 0.5 per cent year-on-year in the 12-months to Q1 2019, totalling €23.0 billion for the period, according to the latest research from global real estate advisor CBRE.
Following a record-breaking 2018, a robust start to the year has maintained in the European hotel sector.
The UK captured 35.5 per cent of capital deployed in the region, reaching €8.2 billion and reflecting a +15.1 per cent year-on-year increase. This growth was spurred by a particularly strong start to 2019, with Q1 up +24.5 per cent.
Spain remains Europe’s second largest hotel investment market. Deals amounted to €4.2 billion in the 12-months to Q1 2019, up +17.5 per cent.
Germany, a supply constrained investment market, experienced modest growth in the hotel deal volume. Over the last 12-months, investment reached €3.9bn, up +7.1 per cent and representing 17.0 per cent of total European investment.
Hotel investment in France amounted to €1.3 billion through the last 12-months. Whilst this represented a decline of -6.0 per cent year-on-year, it was enough to elevate France to Europe’s fourth largest market.
The Benelux hotel deal volume declined by -54.2 per cent, principally as a result of falling deal activity in the Netherlands (-57.0 per cent).
The investment volume in the Nordics also declined despite an increase in activity recorded in Finland (+72.7 per cent). Other notable risers included CEE (+2.3 per cent), driven largely by growth in the Czech Republic (+560.7 per cent), and Switzerland (+208.9 per cent).
”Strong investor demand is putting pressure on yields in Iberia. The Spanish cities of Barcelona and Madrid saw yields fall across all key operating structures. Meanwhile yields also fell in Lisbon and Porto for hotels operated under an operational lease or management contract. There was also yield contraction recorded in Amsterdam and Helsinki for hotels operated under an operational lease agreement.” CBRE said.