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C&W Market Beat 2023 – Lodge Funding In Europe

  • Novel knowledge unearths that European resort transactions totalled nearly €17 Bn in 2023
  • Solid final quarter vastly boosted overall numbers
  • London is the freshest destination for patrons, followed by Paris and Madrid

Across the year, 787 properties were equipped comprising 106,000 rooms and totalling €16.9 Bn in value. This stays vastly below 2019 stages but is easiest 4% looking out the 2022 total. Within the final quarter, volumes reached €5.4 Bn, a 13% lengthen relative to Q4 2022 (€4.8 Bn).*

Plenty of indispensable particular person presents drove these volumes, including the sale of the Westin Paris Vendome, the Center Parcs Allgäu in Germany, the Six Senses Lodge Rome, the Mandarin Oriental and Lodge Sofia in Barcelona, and Haymarket Condo in London (set of residing of enterprise to resort conversion).

Per the compare, portfolio transactions represented one third of the 2023 total volume (vs. 28% in 2022 and forty five% in 2019). Most of these portfolio transactions were carried out within the final quarter of 2023, representing greater than half of the volumes transacted (56% in Q4 2023, vs 31% in 2022 and 35% in 2019).

Spain, France, and the UK were the most entertaining markets, accounting for 59% of European volumes in 2023 with a total of €10 Bn (+7% vs 2022). Among the many discontinue-10 markets, Spain, France, and Greece witnessed the largest growth relative to 2022, with an lengthen of 44%, 26% and 23%, respectively. By approach of the major urban markets, London, Paris, and Madrid proceed to be on the discontinue of the list for patrons followed by Barcelona and Rome.

Source: Cushman & Wakefield— Source: Cushman & Wakefield

Frederic Le Fichoux, Head of Lodge Transactions, EMEA, at Cushman & Wakefield, acknowledged “A worthy final quarter noticed resort transaction volumes boosted but they’re restful a little bit looking out the numbers considered in 2019 and indubitably moderately down on final year. Here is basically attributable to increased stamp of debt, inserting stress on asset values. Like final year, the highest rate and luxury segments of the market remain the most wanted, and we furthermore proceed to gape a ambitious hobby in acquiring properties in resort destinations or urban markets with sturdy leisure query”.

“Early knowledge for January 2024 label over 50% lengthen of the activity in contrast to 2023. This sure pattern is susceptible to bustle up once the central banks launch to decrease hobby rates which is anticipated within the 2d half of this year”.

Jonathan Hubbard, Head of Hospitality, EMEA at Cushman & Wakefield, acknowledged “Lodge investment in Europe became no longer proof against the unheard of lengthen in financing stamp, financial and geopolitical uncertainties in 2023. Then all all over again, the decrease in activity has been much less pronounced in contrast to the broader right estate sector which recorded a nearly 50% decline in transaction volumes.

“This resilience would possibly presumably well furthermore be attributed to numerous components, with the major driver being the continuing pattern of patrons shifting against alternative asset classes, taking advantage of structural modifications within the financial system and society. This has been bolstered by the excellent resort performance recovery across most markets. On moderate, the revenue per on hand room (RevPAR) in European accommodations surpassed pre-pandemic stages (2019) by nearly 22% in 2023. This sure performance growth is anticipated to proceed in 2024, albeit at more moderate level, attributable to a slowing financial system and the impression of inflation on right disposable earnings”.

*The transaction volumes include the partial sale of HIP (35% – ES, IT, GR, PT) and Beatriz (51% – ES) portfolios.

**A contingency of 5% is idea for transactions within the final 365 days, as some presents are published with delays.

Borivoj Vokrinek
Strategic Advisory & Head of Hospitality Research EMEA
Cushman & Wakefield

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