'Demand for hotel investment remains strong, but the limited product available is frustrating investor activity at present," said Christoph Härle, Senior Vice President at Jones Lang LaSalle Hotels. 'German institutional investors are seeking city centre business hotels subject to long-term lease agreements which are currently not being offered in abundance.'Major deals to complete in 2001 included the Nassauer Hof in Wiesbaden, bought by Ebertz & Parnters for €35.3 million ($32 million) with an additional €6.1 million ($5.5 million) to be spent converting it to a luxury hotel. Also in Weisbaden, the Aukamm Hotel was sold for a reported €19.4 million ($17.5 million), with the new owners, Astron Hotels, to spend €1.8 million ($1.6 million) to bring it up to their brand standards.

Ebertz & Partners also bought the 252-room Holiday Inn Bonn, currently operated by Scandic. The US-based Lone Star Fund bought two Quality Hotels in Peine and Troisdorf, paying Friendly Hotels of the UK €5.3 million ($4.8 million) for two assets with a combined room count of 178 rooms. Following this, the Lone Star fund bought the 144-room Queens Hotel Bremen from Queens Moat Houses. Another US investor active in the market was Westmont which acquired the three-star, 123-room Rema-Hotel Savoy hotel located in Dsseldorf.

The effects of the terrorist attack in the USA and the subsequent political uncertainty have not had a significant impact on the German investment market to date. According to Härle, investors and operators in many Continental markets are feeling somewhat more distanced from the current political conflict those in the UK.