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.
Newmark Polska, a commercial real estate advisory firm, has relocated its Warsaw headquarters. Its new office is located in Centrum Marszałkowska in the very centre of Warsaw.
The office of the European Shared Service Centre of the Franke brand, a manufacturer of home and professional kitchen equipment, is moving to the myhive Nimbus building on Jerozolimskie Avenue in Warsaw, owned by Immofinanz. The contract, brokered by ITRA Polska, is for the lease of 1,500 sqm of office space.
At the beginning of July the Warsaw team of EPP company moved to Park Rozwoju office park and will occupy approximately 1,200 sqm on the 6th floor in Building B. EPP is both the owner and the manager of the complex.
New appointments
Karol Milczarski has joined the ranks of Colliers Poland experts, taking up the position of Senior Associate in the Commercial Space Department. His main task is to comprehensively support clients in the process of acquiring attractive street locations not only on high streets, but also within densely populated residential districts.
Danubius Hotels has appointed Andrea Róna as Group Director of Development. She has decades of experience in hotel management and development as well as asset management. The expert will be responsible for the further expansion and development of the hotel chain.
Cushman & Wakefield promotes Petr Markvart, Head of Landlord Representation Services in the Office Agency team, to Partner.
Daniel State, Managing Partner, Rustler Property Services Romania, spoke with Property Forum about the trends in the facility management market and the specialisation of companies in cost optimisation, which has become more important than ever in the context of rising energy prices.
The third and final stage of the Hron Residence project in Zvolen, Slovakia, is now starting to be built. Arkon, the developer of the €15 million project, has announced the final stage launch on its social media.
The modern office stock in Romania has reached 4.3 million sqm at the end of the first semester of 2022, with another 335,300 sqm slated for delivery by the end of 2023, according to real estate consultancy CBRE.
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