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11 January 2016 | Hotels

Hotel Investment Market Austria: Transaction Volume in 2015 significantly increased

According to Christie & Co, hotel investment activity was high throughout 2015 and is set to continue in 2016, with Vienna being the main centre of attention.

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Austria's hotel investment market remains in a state of flux. Especially the second half of 2015 was packed with dealings. According to Christie & Co, hotel properties with a total value of about €120 million changed hands from January to June. The transaction volume for the entire year 2015 even rose to about €310 million, considerably surpassing the previous year's result.
 
Hotel properties with a total value of about €310m were sold in Austria in 2015. Just as in previous years, the investment market picked up sharply especially in the second half of the year, exceeding the previous year's result by about €80 million. "This is mainly due to a spectacular portfolio deal in the autumn involving two prestigious hotels in Vienna," says Lukas Hochedlinger, Managing Director Germany, Austria & CEE at Christie & Co.
 
In October 2015, the Austrian hotelier family Koller sold the entire K+K hotel group with a total of 10 hotels in the 4-star and 4-star superior categories in eight states and a total of around 1,200 bedrooms to the US hotel investment and management group Highgate Hotels. The portfolio also included two hotels in Vienna: the K+K Palais Hotel (66 bedrooms) and the K+K Hotel Maria Theresia (132 bedrooms) in central locations in Vienna.
 
As in previous years, the most activity occurred in the capital Vienna. Hochedlinger mentions the acquisition of Wombats Naschmarkt (130 bedrooms) in Vienna by aRussian investor as an example. In the second quarter of 2015, Immofinanz sold the Leonardo Hotel Vienna (213 bedrooms) directly to its lessee, while the InterCity Hotel with 179 bedrooms was sold by a private foundation to the investment firm Warburg HIH Invest. The largest single transaction of the year took place at the end of the year, when an international corporate hotel with over 200 bedrooms was acquired by a foreign fund. Christie & Co was responsible for the sale on behalf of the owner. The other federal states witnessed a lot of activity as well. In May, the Hotel Bleibergerhof (108 bedrooms) in Carinthia was sold to the Carinthian hotelier Bernd Hinteregger, with the sales process being handled by Christie & Co. Towards the end of the first half of the year, another transaction took place: Bank Austria disposed of the 78-bedroom Seehotel Klopein to the hotelier family Marolt, who are based by Lake "Klopeiner See". Two hotels changed hands in the famous spa town of Baden in Lower Austria: the Novomatic-owned Hotel Sacher (38 bedrooms) as well as the famous Grand Hotel Sauerhof (89 bedrooms), which were both acquired by the Asian investment company K.Y.A.T.T. The latter hotel is set to be renovated and re-opened as a 5-star health resort in August 2017. Furthermore, the Cohotel in Linz was sold to an Austrian private individual in the second half of the year. In September, another chain-operated wellness hotel with over 100 bedrooms in Lower Austria changed hands. The buyer is a private investor from Austria. Both deals were facilitated by Christie & Co.
 
According to Hochedlinger, the boom in the Austrian hotel investment market is likely to continue in 2016 as well. "There are currently several large chain-affiliated hotels for sale," says the hotel property expert. "If investor behaviour and the properties on offer continue to develop as they have been, the level of the transaction volume will be maintained or even exceeded in 2016," he expects. Amongst others, some transactions that were initiated last year are expected to be concluded in 2016. "The sales contract for the Mercure Grand Hotel Biedermeier Vienna with 198 bedrooms, for example, was already signed in 2015. This transaction is set to be concluded in the first half of 2016," reveals the insider, adding: "I look forward to an exciting business year in 2016." At any rate, even at the beginning of this year, Christie & Co reports a well-filled portfolio.