A recent article published in German investment journal Beteiligugngsreport written by Hanno Weiß, head of real estate at Lloyd Fonds AG in Hamburg states that after a period of low transactions, German hotels are experiencing an influx of business. Increased revenue from hotels is predicted to boost investment in German hotel real estate, a market that is currently dominated by foreign investment funds.

Statistics released by the report indicate an increased volume of overnight stays of hotel guests, numbering 307 million guests in the year 2007 (an increase of 3.5 per cent since 2006). A further increase in guests of 1.5 per cent is expected for 2008. In addition there is an increase in the volume of transactions in the German hotel real estate market, from €792 million in 2005 to €2.328 billion in 2006 and 2.3 billion in 2007.

Currently there are few German real estate investment specialists operating in this market. German investors are forecasting profit ratios of between 6-6.8 per cent over the coming year, by using both high-end and budget hotels as an investment base.

Source: Beteiligungs Report 3/2008.

Dr Volker Frühling,
Munich, Germany
V.Fruehling@kpwt-muc.de