Hotel investment market Austria: record-breaking transaction volume
For the first time, Christie & Co has published a multi-page report reviewing the hotel investment market in Austria across 2019. The report finds that in 2019 the Austrian hotel market achieved a record result in terms of the total volume of hotel transactions. In September 2019, for the first time in history, transactional volumes reached a value of EUR 1 billion and by the end of 2019 totalled EUR 1.26 billion, 40% higher than the previous record reported by specialist business property advisor, Christie & Co in 2016. Demand for hotel properties in Austria remains unbroken.
In the first quarter of 2019 several transactions were completed and by the end of the second quarter the transactional volume reached a value of EUR 360 million, the second highest level ever recorded, which was EUR 440 million in the first half of 2016. However, the second half of 2019 exceeded all expectations with transactions reaching a total value of EUR 900 million, breaking the record achieved over the entire year in 2016. Notably, the billion-euro mark was broken in September. In 2019, the transaction volume was ultimately around EUR 1.26 billion, three times the figure for 2018.
Transactions in Vienna accounted for almost 80% of the total volume at almost EUR 1 billion. The sale of the Hilton Vienna am Stadtpark to a South Korean consortium accounted for a significant share of the total volume, at approximately EUR 370 million. In addition, the sale of the Radisson Blu Park Royal Palace, the Austria Trend Hotel Ananas, the Falkensteiner Margareten and the sale of the K+K Hotel Group, of which two hotels are located in Vienna, also contributed to the total volume. Some notable transactions were also recorded in the federal provinces.
In Salzburg, the Meininger Hotel Salzburg, the Hotel am Mirabellplatz and the Plaza Hotel were sold. In Graz, the Plaza Hotel, as well as the development of the InterCity Hotel at the main railway station, were sold in a forward deal. Away from the city hotels, the Goldener Greif Hotel and the Cordial Hotel in Reith, well-known hotels in the Kitzbühel region, changed owner. Wellness hotel sales included the Thermenhof Paierl in Bad Waltersdorf and the Hotel im Park in Bad Radkersburg. Christie & Co supported the sellers in some of the above transactions.
For the first time, Germany was replaced as the most active country of origin by investors from Asia. In addition, there was an increase in investments from France last year, with several French investors active at the same time. Regarding investor profiles, however, it was clear that hotels continue to be particularly valued as capital investments by institutional investors. Measured by the number of transactions, institutional investors and real estate companies together accounted for over half of the transactions. Private hoteliers were also strongly represented with just under 20% of the transactions.
The entire real estate sector can look back on an eventful year in 2019. But the asset class “hotel” has really caused a stir. Simon Kronberger, Director Austria & CEE at Christie & Co in Vienna, summarizes the situation on the hotel real estate market with pleasure.
“For a long time, many investors have perceived hotels only as a marginal phenomenon, but with the record volume of hotel transactions of EUR 1.26 billion last year, it has been impressively demonstrated that hotel investments are a sought-after and established form of investment. As we head into 2020, several significant transactions are already in the final stages of coordination. However, it remains to be seen whether the record result of 2019 will be reached again this year.”
For the first time, Christie & Co has published a multi-page report on the topic in addition to the press release on the hotel investment market in Austria 2019. Please visit our website to download it free of charge.
In the first quarter of 2019 several transactions were completed and by the end of the second quarter the transactional volume reached a value of EUR 360 million, the second highest level ever recorded, which was EUR 440 million in the first half of 2016. However, the second half of 2019 exceeded all expectations with transactions reaching a total value of EUR 900 million, breaking the record achieved over the entire year in 2016. Notably, the billion-euro mark was broken in September. In 2019, the transaction volume was ultimately around EUR 1.26 billion, three times the figure for 2018.
Transactions in Vienna accounted for almost 80% of the total volume at almost EUR 1 billion. The sale of the Hilton Vienna am Stadtpark to a South Korean consortium accounted for a significant share of the total volume, at approximately EUR 370 million. In addition, the sale of the Radisson Blu Park Royal Palace, the Austria Trend Hotel Ananas, the Falkensteiner Margareten and the sale of the K+K Hotel Group, of which two hotels are located in Vienna, also contributed to the total volume. Some notable transactions were also recorded in the federal provinces.
In Salzburg, the Meininger Hotel Salzburg, the Hotel am Mirabellplatz and the Plaza Hotel were sold. In Graz, the Plaza Hotel, as well as the development of the InterCity Hotel at the main railway station, were sold in a forward deal. Away from the city hotels, the Goldener Greif Hotel and the Cordial Hotel in Reith, well-known hotels in the Kitzbühel region, changed owner. Wellness hotel sales included the Thermenhof Paierl in Bad Waltersdorf and the Hotel im Park in Bad Radkersburg. Christie & Co supported the sellers in some of the above transactions.
For the first time, Germany was replaced as the most active country of origin by investors from Asia. In addition, there was an increase in investments from France last year, with several French investors active at the same time. Regarding investor profiles, however, it was clear that hotels continue to be particularly valued as capital investments by institutional investors. Measured by the number of transactions, institutional investors and real estate companies together accounted for over half of the transactions. Private hoteliers were also strongly represented with just under 20% of the transactions.
The entire real estate sector can look back on an eventful year in 2019. But the asset class “hotel” has really caused a stir. Simon Kronberger, Director Austria & CEE at Christie & Co in Vienna, summarizes the situation on the hotel real estate market with pleasure.
“For a long time, many investors have perceived hotels only as a marginal phenomenon, but with the record volume of hotel transactions of EUR 1.26 billion last year, it has been impressively demonstrated that hotel investments are a sought-after and established form of investment. As we head into 2020, several significant transactions are already in the final stages of coordination. However, it remains to be seen whether the record result of 2019 will be reached again this year.”
For the first time, Christie & Co has published a multi-page report on the topic in addition to the press release on the hotel investment market in Austria 2019. Please visit our website to download it free of charge.
