Following a record-breaking 2018, the European hotel investment has had a robust start to the year, maintaining a volume of €23.0 billion for the rolling 12-months to end Q1 2019.

A newly published marketview snapshot from the American commercial real estate services and investment firm CBRE shows a continuation of the buoyant demand for alternative investments. Operational real estate has sustained the relatively high investment volumes observed in the European hotel sector. Following a record-breaking 2018, a robust start to the year has maintained an investment volume of €23.0 billion for the 12-months to Q1 2019.

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. 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.

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).

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