European hotel investment volumes grow 4.3% year-on-year

European hotel investment volumes remain robust in 2019, reaching close to €16 billion ($18 billion) between January and September 2019. This is a year-on-year growth of 4.3 percent, according to Savills.

Investor appetite has continued to be driven by international buyers, with a number of large international investment funds such as AXA IM and Aroundtown deploying significant capital to the hotel sector with London, Paris and Germany’s key cities deemed safer long-term investment options.

As a result of this increasing demand, five of the 22 markets tracked by Savills saw yield compression across all operating structures in the third quarter. This includes Madrid, Lisbon, Warsaw, Dublin and Copenhagen. In the second quarter, only Lisbon saw compression across the board.

Richard Dawes, director in the Savills hotels team, said, “This yield compression across the various operating structures is being driven, in part, by increasing investor appetite for hot