HIGHER MARKET MOMENTUM, BUT LOWER VOLUME
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The noticeable market recovery observed at the end of the year and the generally more positive market sentiment have not yet been reflected in the figures for the first quarter of 2024. Hotel transactions totaled just under €240 million in the first three months, falling short of the previous year's figure by around 13%. The long-term average was missed by significantly 62% as well. Investment activity continues to focus on sales of individual properties; no portfolio transactions have been registered to date.
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The slowdown in new construction activity caused by the coronavirus pandemic is leaving its mark and further limiting volumes: investments in new-build properties and transactions of project developments, which in the past have reliably made significant contributions to the investment volume in some cases, have become rare due to the lack of supply. Instead, value-add investments, e.g. in hotels with short contract terms or opportunistic purchases of vacant properties or conversion properties, are playing an increasingly important role. This is also reflected in the figures: while core and core+ investments dominated in previous years, transactions in the value-add and opportunistic segment currently predominate. Even if this may still change over the course of the year due to the low number of cases so far, it is a clear statement in favor of the overall positive assessment of further market development.
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In terms of investors, foreign buyers stand out with a good 61%, although this is likely to level out somewhat over the course of the year.