Pricing holding up for European hotels, says CBRE’s Pritchard

It is no secret that the hotel sector has been hit hard by the pandemic, however, the market has seen fewer discounted sales than predicted and pricing is holding up, according to Owen Pritchard, executive director and COO, EMEA Hotels, CBRE.

In CBRE’s Pan EMEA hotels update in March, the broker noted that significant additional capital was raised in 2020 to target hotel opportunities. This capital is now being deployed and the market has seen some encouraging activity in the first half of the year across Europe.

This positive investment activity is reinforced by the data. CBRE analysed the large-scale transaction processes on which it advised on the sell-side in 2021 so far, across key European markets, including Spain, Italy, France and the UK. Across these deals, 50% achieved above guide price and 25% were sold at guide price. 'Discounts of 1-5% and 6-15% were seen in only 13% and 12% of these transactions respectively, illustrating that the level of discounts anticipated by some have not occurred,' Pritchard said.

CBRE also looked at the active bidders in these transaction processes by investor type. Private equity firms accounted for 43% followed by institutional investors at 28%, further signalling confidence in the long-term strength of the hotel sector.  

Despite the current uncertainty, CBRE believes that now is a good time to sell. The gap in pricing expectations is continuing to narrow and in turn, investors are showing confidence in their underwriting and operators (both large and small) are adopting a more flexible approach.


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