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Interest rate turnaround and inflation cause hotel yields to rise - investment volume remains below last year's level

Verena Bauer • 11/10/2022

In the first three quarters of 2022, international real estate consultancy firm Cushman & Wakefield recorded approximately EUR 1.2 billion of transaction volume for hotel properties in Germany. Compared to the same period last year (Q1-Q3/2021: EUR 1.5 billion), this corresponds to a decline of about 20 percent. With the exception of three portfolios, only individual-property transactions were recorded. These exhibited an average volume of EUR 23 million.

German investors were responsible for the bulk of hotel transaction volume, at 72 percent. This was followed by investors from Great Britain and Austria (10 percent each), Austria (11 percent), France (7 percent) and the USA (1 percent). Institutional investors contributed 44 percent of transaction volume, while private equity investors and private investors/family offices each accounted for 14 percent, hotel operators 13 percent, real estate companies 9 percent and developers 7 percent. Sales of hotels without an operator represented around 53 percent of the transaction volume. 

Hotel Investment Market Q3

"Although the operative hotel markets recovered significantly in the past months, the interest rate turnaround and high inflation triggered significant uncertainty. As a result, market participant activity is still very restrained and purchases and sales are very selective. Added to this is the difficulty of pricing, with a considerable gap between the expectations of sellers and the achievable prices” commented Stefan Giesemann, Head of Hospitality Germany & Austria at Cushman & Wakefield.

C&W recorded an increase of at least 50 basis points in prime yields in all markets and expects this trend to continue in view of the expected further interest rate hikes in the coming months. With a number of larger deals still nearing completion, C&W forecasts total transaction volume of between EUR 1.8bn and EUR 2.0bn by the end of the year.

The largest transactions in Q3 2022 included:

  • Everest Management sold the 257-room Holiday Inn in Unterhaching to a local developer focusing on the long-stay segment. It is part of the Sonnenhöfe ensemble, which also comprises around 26,000 m² of office space.
  • Corestate sold the Joyn former serviced apartment complex in Düsseldorf to Union Investment fund Geno Rheinland Real Estate. The 70 apartments will be operated by Limehome in the future. 
  • The 177-room “wellness” resort A-ROSA on Sylt was sold to the Wirtgen Invest family office. Since its opening in 2010, the hotel has been operated by DSR Hotel Holding under a long-term lease. The seller is mutual fund company Deutsche Immobilien Invest Hotel Fonds.
  • Arbireo Capital bought a 105-room B&B hotel in Ravensburg on behalf of a family office. The hotel, which opened in 2020, is leased to B&B for over 20 years. The seller is the property development company of Wilhelm Geiger GmbH & Co. KG.


verena bauer
Verena Bauer

Head of Marketing & Communications Germany, Cluster Lead • 60313 Frankfurt am Main


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