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02 July 2018 | Hotels

Hotel Investment Market Austria H1 2018: Fewer deals, but higher transaction volume

Vienna. In 2017 the hotel investment market ended with more than half a billion Euros in transaction volume and a growing trend towards the purchase of development projects. This demand has remained high in the first half of 2018, resulting in approximately €230 million in hotel real estate transactions, according to findings by hotel real estate specialists Christie & Co.

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“The hotel investment market in the first half of 2018 was characterized by fewer but larger deals with a total of about €230 million, which significantly exceeded the same period last year. In the first half of 2017, only €130 million were generated,” explains Simon Kronberger, Associate Director at Christie & Co.

One of the largest transactions in the first half of 2018 came from a holiday destination, the Hotel Grand Tirolia (81 bedrooms) in the well-known ski resort Kitzbühel, which was sold from Beneco Private Foundation to a private Austrian investor. Some major transactions were also registered in the federal states. Hunguest Hotels for example sold the Hotel Heiligenblut (113 bedrooms) and the Hotel Post (50 bedrooms) in Carinthia to a Hungarian private investor. In addition, 50 percent of shares in the 175-bedroom Hotel Park Inn Linz were sold by UBM to the co-owner, List Group. In June, Styria saw the sale of the 44-bedroom Hotel Landskron in Bruck an der Mur by the previous owner, hotelier Bernd Hinteregger, also sold to an Austrian private investor, with Christie & Co facilitating the sales process.

It is also key to note transactions in the Austrian capital, as in previous years, Vienna's turnover has been the highest in terms of transaction volume. The largest transaction was the 400-bedroom Hotel Motel One at Westbahnhof, which was sold as part of a mixed-use property from the Swiss Acron Group to Real I.S. It was the largest transaction in the first half of 2018, in terms of transaction volume and number of rooms. As announced by Christie & Co at the beginning of May, two hotels owned by the Socialist Party (SPÖ) and the Renner Institute were sold – 95-bedrooms Gartenhotel Altmannsdorf and 7 Days Premium Hotel Vienna (95 bedrooms). Alongside big transactions, smaller hotels were also shown to have attracted buyers. The Hotel zur Staatsoper, a comparatively small property with 22 bedrooms, was sold to a private investor in Tyrol.
Lukas Hochedlinger, Managing Director at Christie & Co in Austria, comments, “Since Christie & Co has been observing the transaction market, there has only been one other year which achieved a higher transaction volume in the first half of the year, the record year 2016. Above all, the large number of transactions in the federal states shows that holiday regions are also increasingly attracting investors' attention.”

Simon Kronberger adds, “We are still experiencing a high demand for hotel real estate. Investors of all kinds are interested in this special asset class. In addition, further large transactions are emerging in the second half of the year. Some of them at top locations in Vienna and Salzburg, as well as holiday destinations such as Reichenau an der Rax or Salzburger Land, are currently being marketed by Christie & Co. If the statistical trend continues and some of the upcoming transactions come to fruition, we expect that the transaction volume in 2018 will be above 2017, and close to the record year 2016."
 
The high level of interest in hotel real estate in Austria is underpinned by the equally positive trend in tourism. A recent publication from Christie & Co on the Austrian provincial capitals reveals rising hotel market performance figures in all nine cities surveyed.