7/19/2022 | Hotels

Hotel investment market Austria: institutional investors return

Vienna. The first half of 2022 is behind us, and Christie & Co takes this opportunity to review the transaction activity in the Austrian hotel real estate sector. The focus remained clearly on leisure hotels, but some city hotels also changed hands, resulting in a transaction volume of over EUR 230 million in the first six months.

After hotel transactions picked up again on the domestic market in 2021 and a total investment volume of EUR 400 million was recorded, this dynamic is still noticeable in 2022. Especially institutional investors are clearly more active again. Already in the second half of 2021, among others, the Liechtensteinische Landesbank, made a move in Vienna's 2nd district (MEININGER Hotel Vienna Downtown Franz), and the German Real I.S. AG also acquired the Mooons Hotel Vienna in the same period. This trend continued in the past six months.

For the first time since the beginning of the pandemic, the city hotel industry is also in much higher demand again, here above all the federal capital Vienna. For example, the MEININGER Hotel Vienna Downtown Sissi (102 rooms) in the 2nd district changed hands and was acquired by GalCap Europe in the first half of the year. With the Bassena Hotel Vienna Donaustadt (198 rooms), a transaction also took place in the 22nd district. Here Christie & Co was able to identify Raiffeisen Immobilien KAG as the buyer for the project development in a structured sales process.

The leisure hotel industry also remained high on the agenda. In the province of Salzburg, the Hotel Kesselspitze found a new owner in Valamar Riviera. The Croatian tourism company with Austrian owners is thus expanding its portfolio in Obertauern with a 5-star hotel with 66 rooms and will operate it in the future as the first location of the “Valamar Collection” brand. Furthermore, 12.18 Asset Management GmbH took over the 5-star superior TOP Hotel Hochgurgl (66 rooms) in Öztal. The ALPRIMA Aparthotel (73 apartments) in Hinterstoder also changed hands in 2022 and will henceforth be part of the portfolio of C&P Immobilien GmbH.

After national developers and private investors were primarily active in the past two years, institutional investors have also been back on the transaction market for a few months. Although the markets have recovered significantly, a certain reluctance on the part of banks is now more and more noticeable. Increased equity ratios and rising interest rates are making it increasingly difficult for investors to raise finance, which is why more pure equity transactions have been observed. It can therefore be assumed that the topic of “hotel financing” will dominate the second half of 2022.

Overall, the investment volume in the first half of the year was over EUR 230 million. Compared to the same period of the previous year 2021, the result could even be more than doubled. “In general, we see a lot of movement on the market again and are looking positively into the future. The security of many institutional investors is returning and the willingness to invest in the city hotel industry is also increasing again. Of course, one must observe the current developments on the capital market, but the buying interest of national as well as international investors is still there,” summarises Simon Kronberger, Director Austria & CEE at Christie & Co.

Christie & Co currently markets over 20 hotels in Austria and more than 300 across Europe on behalf of the owners.