In Q1 2018, European hotel transactions amounted to €4.02bn, representing a decline of -9% compared to Q1 2017. Highlights: The UK emerged from Q1 with a +81% y/y increase in hotel investment volume. This growth was underpinned by multiple portfolio deals. Other markets to experience growth included Ireland, The Netherlands and Italy. Markets such as Germany and Spain remain in high investor demand; however, a shortage of stock for sale supressed Q1 deal volumes. Yields generally remained flat across Europe, with most downward pressure on yields in the fixed-income, long-lease space.
The CBRE 2018 Europe Real Estate Market Outlook provides insight on the key trends our experts think will affect the European property industry over the next 12 months. Key takeaways: Positive economic environment for most of Europe through 2018 to 2019 The prospect of higher long-term interest rates will start to pose a challenge to property pricing Continued strong growth in assets under management will put pressure on investors to deploy capital Another strong year for office-based employment growth in 2018 Growth in appetite for flexible offices will permeate across European markets Retailers increasingly focused on getting their city strategy correct. This will support rental growth at the prime end of the market Very strong demand growth has cut the availability of large-scale modern space, producing capacity constraints in some of the main European logistic hubs. Coupled with strong e-commerce relate growth this will support further rental increase The evolution of the residential sector will be supported by the sheer quantity of capital available for real estate investment in 2018, increasingly through development in order to build scale Stock shortages and premium pricing in gateway cities for the hotel sector will encourage investors to look further afield at secondary and niche opportunities A key feature in 2018 will be operator consolidation across Europe in the alternatives sector. This will present real estate investors with new partnership opportunities as well as enhancing covenant strength.
Now in its fifth year, the EMEA Fit Out Cost Guide is widely regarded as an industry benchmark. It provides market-leading insights and data to clients, providing invaluable support when it comes to location and fit out decisions. The EMEA edition is part of a global suite of guides, designed to support our clients wherever they do business. This year's edition covers 64 locations. Key features including different specifications, technology and furniture costs, and moves and relocations, are continued, while details around workplace have been updated in line with current trends. The traditional and agile layouts featured in this year’s Guide have also been updated, to reflect client demands, including innovative space and furniture solutions.
With Europe undergoing a period of prolonged economic and political uncertainty, the CBRE Hotels European Investor Intentions Survey aims to give hotel property stakeholders useful insight into the capital deployment plans of investors in hotel real estate. In doing so, we hope to provide a clearer picture of the future shape of the regional hotel investment market. This year’s European Investor Intentions Survey was answered by 336 real estate investors, all of whom have a significant interest in the hotel asset class. We were encouraged to find that an overwhelming majority of survey respondents intend to invest either the same or more capital into hotel real estate in 2018, compared with 2017. With all indicators pointing to another strong year for European hotel investment in 2018, we seek to answer the key question: which European hotspots will come to the fore?