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INVESTMENT FLOWS INTO CZECH HOSPITALITY SET TO INCREASE IN 2015

Investments exceeding EUR 220 million are expected to flow into hospitality properties in the Czech Republic this year, according to global property adviser Cushman & Wakefield.  Both domestic and international investors are interested in the hotel market, and Asian investors in particular are examining the Czech hospitality market more intensively than before. This growth applies across the entire Central European region, continuing the upward trend started in 2013.

“Since the beginning of 2015 we have facilitated the sale of six hotels in Central Europe. More deals are in the pipeline for the upcoming months. We have just launched the sale of the Union Hotels portfolio in Ljubljana, Slovenia. All types of capital are interested in buying – from private to corporate to institutional,” says Frédéric Le Fichoux, Head of Cushman & Wakefield’s CEE Hospitality Team.

“We are seeing interest from new capital to invest in the region. Many of these interest parties are Asian and Middle Eastern investors, and among them, Chinese investors. There are two reasons for this: China has lifted the restrictions on property acquisitions abroad and the demand of Asian tourists for Central Europe is growing,” Mr Le Fichoux adds.

The driver behind the increasing investments in Czech hotels is primarily the improving performance. Both occupancy and average room rates are growing, in effect improving hotel profitability. The decrease in the number of Russian clients has been compensated by tourists from Germany and, more importantly, China and South Korea.

The first two hotels to transact in 2015, in the Czech Republic – Courtyard by Marriott Prague Airport and Courtyard by Marriott Plzen – changed owners in February. Cushman & Wakefield’s Hospitality Team advised the vendor CA IMMO on both transactions. More transactions are expected – at this point, we know that negotiations are underway regarding the sale of three hotels in the Czech Republic. The sale of the Hilton in Prague is likely to be the biggest deal for this year.