The investment volume achieved in 2016 totalled almost €1.2 billion with 46 transactions recorded in core CEE hotel investment markets. In comparison, 2015 reached just over €700 million with 45 transactions. Austria was the star performer with almost €800 million transacted, which made up 67% of the total investment volume. In other CEE markets volume was lower than in 2015 with a particular decline in Poland which more than halved in volume. The Czech Republic accounted for 18% of total CEE investment share; most of the investment took place in Prague which saw 7 transactions including the Hilton Old Town, Park Hotel and Chopin Hotel.
The CEE hotel industry reported growth across all key performance metrics. Increasing number of tourists have chosen CEE destinations, thus occupancy rates returned or even surpassed the pre-crisis levels, reaching 72% on average up from 69%. As the cost of visiting CEE has gone up along with the increasing hotel room rates, profits have been soaring. The average price per room reached €76.6 up from €73.6 in 2015. While the Eastern markets achieved double digit growth in terms of revenue per available room, the more mature markets of Central Europe including Prague and Warsaw saw growth of around 6%.
Performance change over 2016
Money has been flowing in from Far East Asia, the Middle East, America as well as Europe. Hence the region has become truly international.
“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 travellers 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,” says David Nath, Head of CEE Hospitality Team at Cushman & Wakefield.
Banks’ appetite for lending is reflected in the return in hotel development activity with 2017 expected to deliver an additional 4,000 rooms across Central and Eastern European capital cities. The markets with the greatest development prospects are Warsaw and Budapest. Prague is an exception with a limited pipeline due to planning constraints and only a few sites suitable for hotel development.
“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. We will also see increasing capital invested in less mature hotel investment markets such as Bucharest and Sofia” says Frederic Le Fichoux, Head of Hotel Transactions - Continental Europe and adds “Average daily rate is expected to rise further, generating higher income returns for investors especially in more mature CEE markets, where the development pipeline is limited.”
In 2017, investors’ activity will be notable especially in Hungarian, Austrian and Romanian hotel investment markets, where significant assets are set to be put up for sale or about to be transacted.
Iulius has attracted Kaufland as an anchor tenant in Family Market Tomești, based in Iași County. The retailer will open a 4,000 sqm hypermarket, while the whole project will have a leasable area of around 16,000 sqm.
DHL Express Romania has opened its new operational center at VGP Park Bucharest North in Ștefăneștii de Jos, marking the company's first carbon-neutral facility in the country, following a €5 million investment The 4,130 sqm facility includes 3,604 sqm of warehouse space and 526 sqm of offices, with a maximum sorting capacity of 2,800 items per hour.
Industrial developer CTP announced that Moemax, part of the XXXLutz Group, has signed a lease for a 5,300 sqm logistics unit at CTPark Bucharest South.
New appointments
Cushman & Wakefield has strengthened its Warsaw-based Capital Markets team, led by Paweł Partyka, with the appointments of Jakub Grabara and Natalia Wołyniec. The new hires will support the company in delivering transactional advisory services across the commercial property market.
At the beginning of September, Ewa Ciołek and Piotr Meleszko were promoted to Senior Leasing Manager. MLP Group, recognising the internal competencies and achievements of its team, emphasises the importance of further improving the efficiency of its leasing operations, which are key to the company's dynamic growth.
Avison Young's Investment Advisory team in Poland has welcomed a new member, Katarzyna Sielewicz, who takes the role of Senior Consultant. Katarzyna holds a master’s degree in Finance from the Stockholm University School of Business and completed an exchange semester at Cass Business School in London. She gained international real estate experience working with the global Research and Strategic Advisory team at Cushman & Wakefield (formerly DTZ) in London.
Czech banks and building societies have provided new mortgages for CZK 29.6 billion (€1.2 billion) in September. Compared to August, the volume of activity has increased by 14%, reports cbamonitor.cz.
Property transactions in Romania fell by nearly 1% in the first two months after the VAT increase compared to August-September 2024, but rose over 10% compared to May-June transactions, according to official data from the National Agency for Cadastre and Real Estate Advertising (ANCPI).
Local property developer Sema Real Estate has launched pre-sales for the first phase of its Sema Home residential project in central-western Bucharest.
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