Inflation-hedging, diversification, real estate appreciation
and strong asset management convince affluent investors to spend nearly €1
billion in H1 2025.
EUROPE – A 21% year-over-year increase in single-asset deals
driven by high-net-worth-individuals (HNWIs) targeting upscale and
upper-upscale properties highlighted €10.4 billion in transactions volume in
Europe during the first half of 2025, according to HVS. In a matter of six
years, HNWIs went from being the third smallest net buyer among the other
investor classes in Europe to being the largest net buyer in H1 2025.
The largest net buyers over the first semester were HNWIs
(€967 million) and real estate investment companies (€298 million). HNWIs also led
all other investor classes in average price per room on acquisitions (€581,000
versus an average of €228,000).
Notable HNWI acquisitions in H1 2025 included the 20% stake
acquisition of Firmdale Hotels by Swedish pharmaceutical entrepreneur Lennart
Perlhagen for a reported £300 million (€364 million), the acquisition of the
remaining 67% shares in the Four Seasons Astir Palace Hotel Athens by George
Procopiou (a few months after having acquired the initial 33% shares), and the
acquisition of the luxury Alpina Gstaad in Switzerland by an undisclosed U.S.
investor for a reported SFr200 million (€210 million).
The largest net sellers were institutional investors (€424 million) and Real Estate Investment Trusts (€242 million).
HVS
The largest net sellers were institutional investors (€424
million) and Real Estate Investment Trusts (€242 million).
HVS co-authors Maxime Gauthier and Sophie Perret posited
that hotels have long been perceived as a highly specialist investment market,
where both time and industry knowledge were necessary to reach a certain level
of returns, often discouraging HNWIs from entering the market. Nonetheless,
they said, the industry’s strong potential for inflation-hedging,
diversification and real estate appreciation, as well as the increasing
sophistication of the industry, where dedicated professional operations and
asset management capabilities are present, increasingly convince affluent
investors to consider hotels in parallel to other types of direct property
investments.
H1 2025 deal data
Spain was the most sought-after market, leading the U.K.,
France and Germany, according to co-authors Maxime Gauthier and Sophie Perret,
with overall deal volume slightly below H1 2024 levels.
An increase of 9% in the average number of rooms
per hotel transacted led to a decrease in the average price per room
of 8% compared to H1 2024.
Single-asset deals in Europe accounted for a record €7.1
billion of H1 2025, 12% higher than 2019 levels in real terms. Notable
transactions included the sale of the 1,037-room Mare Nostrum Resort in
Tenerife, acquired for €430 million by Spring Hotel Group from Brookfield
AM. It also included the acquisition of the remaining shares of the Four
Seasons Astir Palace Hotel Athens by George Procopiou from AGC Equity Partners.
After having soared in H1 2024, portfolio transaction
activity contracted in H1 2025, decreasing by 30% to €3.3 billion. With the
same number of transactions (24) as in H1 2024, portfolios included on average
fewer hotels (6.1 hotels per portfolio in H1 2025 vs 7.8 in H1 2024) and fewer
rooms (807 vs 973). Notable portfolio transactions included the acquisition of
28 hotels in the Nordics by CapMan Real Estate from Midstar Fastigheter AB and
a 20% stake acquisition in Firmdale Hotels by Swedish businessman Lennart
Perlhagen, both occurring in February, and Brookfield AM’s acquisition of
Generator Hostels from Queensgate for €776 million in May.
More than half of the total transaction volume occurred in
four countries: Spain (17%), the U.K. (16%), France (12%) and Germany
(11%). London retains the title of most active city in the first semester (€827
million), well ahead of Paris (€537 million) and Berlin (€459 million).