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German Hotel Investment Falters Due To Lack Of Product

FRANKFURT-Hotel investment across Germany fell in 2001 after the bumper year 2000. However, demand remains strong and research from Jones Lang LaSalle shows there is still demand if the right property becomes available.

By Charlie Jacoby | Updated on November 02, 2001

FRANKFURT-Hotel investment across Germany fell in 2001 after a spate of activity in 2000 which saw investment volumes reach €514 million ($463 million). New research by Jones Lang LaSalle Hotels says that this is mainly due to the location and grade of the assets transacted, both of which are lower than last year.

‘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.

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