CEE hotel investment market in deep insecurity

The value of transactions concluded in the hotel sector in Central and Eastern Europe reached a record level of €1.4 billion in 2019, and as many as 55 hotels changed ownership. The main impulse was the possibility of obtaining a higher rate of return on the investment made in our region, compared to many significant markets in Western Europe, as well as the promising potential for long-term growth, according to the latest report ‘Hotel Investment Scene in CEE’ by Cushman & Wakefield and international law firm CMS.

Poland with a transaction volume of €391 million is responsible for 27 percent of the value of acquisitions concluded in 2019 in the CEE countries. Our market recorded a more than threefold increase on an annual basis, placing itself in 2019 behind the Czech market with transactions worth €620.4 million.

“Currently, optimism regarding further growth has significantly weakened due to the Covid-19 pandemic, which has an increasing impact on the tourism sector and the global economy. We are currently at a time when it is increasingly difficult to predict what the final impact of a pandemic will be on the situation in the hotel sector,” Lukas Hejduk, CMS Partner managing the practice of the office in the hotel and recreation sector in Central and Eastern Europe, commented.

In the first months of this year, a number of transactions were carried out on the hotel market, and their total value amounted to approx. €297 million. These acquisitions concerned six assets, mainly located in Budapest. Some investors are still willing to purchase hotel facilities and conduct due diligence, although at the same time several transactions have been suspended due to pandemic.

(WBJ)