European hotel real estate investment was up 5.3% year-on-year in the 12-months to Q2 2019, totalling €24.3 billion for the period. Conversely, over the same period, the All Sectors investment volume fell by 7.8%. This reflects the increased demand for operational and alternative property types given the expectation of continued income growth. 

Some of the key highlights include:

  • The UK hotel deal volume was down 26.0% to €6.3bn. This was largely the result of a fall in the number of portfolio sales;
  • The Spanish hotel investment volume increased by 67.2%, mainly as a result of more transactions in leisure and resort markets;
  • Germany remains a supply constrained market in terms of large asset deals and portfolio deals. A greater share of investment has been recorded outside of the 'Big 5' cities;
  • Italian hotel investment increased by 133.2% to €3.1bn. Market yields for Milan and Rome were lowered in Q2 on the basis of stregnthening investor demand.