Poland, Romania, Croatia interesting for investors
LUKAS HOCHEDLINGER, MANAGING DIRECTOR CENTRAL & NORTHERN EUROPE, CHRISTIE & CO:
What trends will dominate hotel market in CEE region in 2018?
KPIs will increase further and will be stronger than in established European markets. Therefore, further developments will come and brand penetration will increase. There is a strong trend to serviced- and long stay apartments as well as to mixed use concepts. We also expect a further growth of limited service hotels in the midscale segment.
How would you summarize 2017 for hotel market in CEE region?
Some of the city markets have experienced high increases in KPIs and therefore landed on the list of international investors who had previously been cautious in CEE. Investors’ appetite led to a growing number of developments and transactions in these markets with more international brands trying to expand in the region.
Which country in CEE region is nowadays the most interesting for industry investors ?
Poland has always been a secure market with various city markets that are of interest for investors. High demand of business travel and stable tourism have made Poland one of the favourite markets in CEE. Investors that seek higher yields however look even further East and see Romania as well as Croatia as more attractive markets. Also, selected cities such as Budapest and Prague are among the most interesting at the moment.
What affects the most investors’ decision about new hotels location in CEE region?
This really depends on the type of investors. Most of them seem to be yield driven and while established markets don’t offer adequate yields any more, investors tend to look for markets that offer better returns than Germany. On the other hand, the security of the overall deal needs to represent the yield, i.e. lease cover ratio, tenant’s covenants, upside potential, etc.