REAL ESTATE INVESTORS NAME THE UK AS TOP TARGET FOR HOTEL INVESTMENT IN 2017
485 European hotel investors reveal their target markets, challenges and opportunities for the year ahead
The UK is the top European target for hotel investment in 2017, according to a new survey by leading global property advisor CBRE.
CBRE’s ‘European Hotels Investor Intentions’ survey found that respondents view the UK as the most attractive market in Europe for hotel investment, reflecting a growing confidence in the UK real estate market following a post-referendum slowdown in investment activity in 2016.
Germany is rated by investors as the second most attractive investment market for hotels, followed by Spain, France, and Italy and the Netherlands.
2017 will see some complex opening manoeuvres in the Brexit negotiation, not least because of the potential for some twists and turns in European politics too. Brexit will take time but the wheels of the economy will still turn and there is no doubt that the UK’s particularly strong economic fundamentals will further underpin investor confidence in purchasing UK property.
The wide-ranging appeal of hotels as an investment asset class clearly demonstrates hotels’ transition into the mainstream. The general investor appetite to invest more into the hotels sector through 2017 should result in an increase in the European-wide hotel deal volumes, but we may find that growth in deal activity will face the challenges of limited supply.
In a clear reflection of the gathering strength of hotel investment demand the survey also revealed that 87% of respondents are planning to invest the same or more into hotel real estate in 2017. This suggests that the hotel investment market has become more attractive compared to the situation a year ago.
The survey findings further revealed that hotel investors cited “economic growth” as the greatest opportunity to European hotel investment in 2017. This was closely followed by “the cost and availability of debt”. However, the primary concern for hotel investors in 2017 is “asset pricing and geopolitical influences”. This marks a difference in the perception commercial -sector-investors have compared to hotel investors, as the former see "rapid interest rate increases” and “a major global economic shock” as the major risks, as found in the wider CBRE Global Investor Intention survey.