90% of respondents remain open to investing in hotels. However, most of the respondents (60%) are narrowing their focus to Core properties or deals with corresponding price discounts. 10% of those surveyed have currently put their hotel acquisitions on hold. Most would like to wait for the first signs of a recovery in the tourism markets or performance results.
50% of respondents expect a complete recovery of the markets in 2022, 32% in 2023 and 14% in 2024 or later. Just 5% of investors expect a complete recovery as early as 2021.
Berlin has the highest rating as an investment location. The federal capital achieved the highest popularity ratings among the 10 largest hotel markets, followed by Munich, Hamburg and Frankfurt. Cologne is rising as an investment location among the primary locations. In terms of segments, serviced apartments, midscale and lifestyle hotels achieved the highest ratings. The conference segment recorded the lowest score.
60% of investors reflect variable operating lease rents in their price calculations. Despite the uncertainties regarding performance results, variable operating lease rents are still included in the purchase price by the majority of investors. Here, however, discounts are applied to the forecast stabilised cash flows. For almost 40% of the respondents, variable elements are not considered in their appraisals.
Leaseholders, guarantees and rent covers gain in importance when investing. According to the survey, operating tenants, guarantees and rent covers for hotel investments will be rated much more critically in future, followed by the micro location and quality of construction.
Stefan Giesemann, Partner, Head of Hospitality Germany & Austria at Cushman & Wakefield: "Our survey on the hotel investment market in Germany shows that institutional investors are increasingly looking at a positive future despite the current uncertainties, and although requirements have increased, they are still pursuing hotel investments. The results also underline the confidence of investors in the German hotel market and its future as an attractive real estate segment."