European hotel investment volumes totaled EUR 3.8 billion in the third quarter of the year, taking the total turnover to EUR 10.3 billion since the start of the year, according to the latest report of real estate firm CBRE.
The third quarter of the year was overall more positive compared to the first half of 2016 with the decline in deal volumes only by 6% compared to a strong third quarter last year, according to the latest figures from global commercial property adviser CBRE.
The Spanish hotel investment market recorded the highest year-on-year growth of 162% in Q3 this year, with transaction volumes reaching EUR 537 million. This was largely driven by strong investor demand to buy and capitalize on the improving economic and performance recovery which has continued to gather pace. Transactions this quarter spanned the country, including gateway and secondary cities and resort locations. A notable transaction was the five-star Pullman Barcelona Skipper, 241-keys sold for EUR 90 mln. Italy and Ireland have also seen a year-on-year increase of 135% and 106%, respectively in Q3 2016.
The German hotel investment market has remained the most attractive to investors with transaction volumes reaching EUR 856 mln in Q3 2016. Germany continues to offer consistently high levels of liquidity and strong market fundamentals.
“European hotel transaction volumes continue to reflect the challenging current climate and the decline is in line with the slowdown across all mainstream European commercial property market. However, the rate of the negative growth in the hotel market is slowing and a strengthening deal pipeline in the UK, Spain, and Italy suggests more buoyant deal volumes for the beginning of 2017”, stated Joe Stather, Information and Intelligence Manager EMEA, CBRE Hotels.
“Investors’ interest for Spain is on the rise on the basis of intensifying economic fundamentals and performance growth across the country, and attractive asset pricing relative to other consolidated European destinations. The liquidation of non-performing loans will increase the transaction activity in the market over the coming months and we also recognize a number of value-add and core opportunities for more conservative sources of capital”, added Jorge Ruiz Andres, CBRE Hotels, Spain.