Investment in CEE hotel markets on the rise – report
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The total value of the investment transactions closed in the hotel property markets of Central and Eastern Europe (including Austria, Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia) increased from just over €700 million in 2015 to almost €1.2 billion last year, according to the latest report by Cushman & Wakefield. The excellent performance of the region as a whole was largely the result of deals finalized in Austria, which accounted for as much as 67 percent (almost €800 million) of the 2016 volume, the study said. The volumes recorded in the other countries of the region, including in Poland, were lower that those seen in 2015.
The hotel industry in CEE has been defined by growing occupancy rates and soaring profits, which have attracted new capital from the Far East, the Middle East, North America and Europe. “In the last few years the region has seen important inflows of capital as wider groups of investors try to take advantage of the strong performance of the local hotel industry. Among the key factors driving performance are the continued strength of inbound international tourism into the CEE region, supported by Asian travelers as well as the re-focus of North African and Western European tourism. Moreover, the willingness of banks to finance hotel acquisitions has significantly enticed high investor demand,” said David Nath, head of the CEE hospitality team at Cushman & Wakefield.
The development activity in the sector has been rising, with up to 4,000 rooms expected to be delivered in CEE capital cities this year. Warsaw and Budapest are the two markets with the greatest development prospects in the region, while investment activity will in 2017 mainly be focused on the Austrian, Hungarian and Romanian markets, according to Cushman & Wakefield experts. “Although we expect growth to slow down slightly during 2017, the investment market will remain robust compared to other, more established markets in Western Europe,” said Frederic Le Fichoux, head of hotel transactions, Continental Europe, at the company.
