Whole European lodge transaction quantity fell by 69 per cent within the 12 months of the pandemic following a report excessive the earlier 12 months when €27 billion-worth of lodge offers had been struck.
In response to the annual European Lodge Transactions 2020, printed this week by HVS and its brokerage and funding companies division HVS Hodges Ward Elliott, lodge transaction quantity reached €8.5 billion final 12 months.
Single-asset transactions accounted for 65 per cent of all offers, totalling €5.5 billion, whereas portfolio offers represented 35 per cent at €three billion.
Earlier than the pandemic, 2020 was set for report transaction ranges.
The 12 months began strongly with transactions in January and February up 2.5 per cent on 2019 with volumes of €2.7 billion and a 1.Eight per cent rise within the common sale costs per room to €170,000.
Subsequent lockdowns throughout Europe coupled with restricted availability of debt financing pushed transaction ranges down by 66 per cent with just one sort of purchaser, high-net-worth people, investing in bigger volumes of lodges than within the earlier 12 months.
A complete of 201 European lodges and greater than 44,000 rooms exchanged house owners in 2020.
The UK retained its place on the prime of the transaction desk, posting the best stage of funding quantity throughout Europe with a complete of €2.1 billion (£1.Eight billion).
Some €1.6 billion-worth (£1.four billion) of UK transactions had been London-based.
Germany maintained second place within the transaction rankings, with complete lodge funding quantity for the 12 months reaching €1.7 billion.
Munich was its most favoured metropolis with €501 million-worth of transactions.
Wanting forward, HVS expects that the second half of 2021 will start to point out indicators of transaction quantity restoration as financial help programmes fall away and loans come up for refinancing, however the bulk of the restoration is prone to occur in 2022 in parallel with rising lodge income streams.
“The complete impression of the pandemic is predicted to have an effect on the transaction market later this 12 months with a rise in distressed debt and opportunistic funding forward of a gradual market restoration.
“Nevertheless, nearly all of quantity restoration is predicted in 2022 as immunisation programmes are accomplished and the leisure and company journey sectors begin to get well,” commented report writer Shaffer Patrick, affiliate, HVS Hodges Ward Elliott, London.
Check out the total report here.