Europe’s leading hotel property specialist and patron sponsor of IHIF in Berlin 2-4 March 2015 Christie + Co acts for and advises most of the major players in the hotel sector across Europe. This places it in an ideal position to offer insight into the performance of the European hotel market.
European recovery in the hotel sector began in the UK which in 2014 saw confidence returning across the hotel industry and transactional activity accelerating. This resulted in average business property prices in the hotel sector increasing by 17.2 per cent in the region during the year.
Christie + Co’s Managing Director Chris Day says: “We saw trading performances gradually strengthen and funding become more available. A number of portfolio deals were transacted during the year and in the majority of cases we were able to drive prices and exceed initial expectations.”
Investors coming out of North America into Europe were principally responsible for driving this activity. During 2014 UK hotel owners and debt holders rushed to capitalise on the hunger for hotels, which are seen to offer attractive returns and opportunities to add value.
Chris adds: “The pace of recovery in the UK has been very dramatic during 2014, both in terms of investment appetite and trading levels. Looking at data from previous recessions, the recovery curve has never been quite so steep. Buyers have been bidding 10-15 per cent ahead of where guide prices have been fixed.”
International Managing Director and Head of Consultancy Andreas Scriven says: “Looking at the markets across Europe, the story is variable. We are trading in different macro environments with the situation in Germany different from that in France and from country to country within Scandinavia.”
He adds: “We are certainly seeing more confidence return to the market which is driven by the success story in the UK market. However, as the UK is seen as getting expensive, investors are now looking towards Ireland and continental Europe, Spain in particular.”
Certainly the problems created by the Eurozone and the lack of inflation in some of the markets which is leading to depressed economies, particularly in France, Spain and Italy, has impacted on the ability for the market to grow. However, Scriven says we are starting to see some movement, albeit slow.
“Our clients that trust us in one country travel with us on that journey of recovery through Europe. They can rely on the advice we gave them in one country, the same way as they can in another in which we are active.”