• Appetite remains despite low capital growth

The appetite for hotel property in Europe remains strong despite fears about receding returns.

The past week has seen Pandox and INVESCO make purchases, in deals that total Eu172m.

INVESCO has bought five hotels in two separate transactions that total Eu120m. The properties are the 180-room Radisson Park Inn at Charles de Gaulle airport, a Sofitel in Nice (now a NH), two Holiday Inns in Wroclaw and Gdansk and a 146 room Innside Premium hotel in Frankfurt.

Four of the hotels were bought from the Azure Group which leased the two Holiday Inns back.

There is now a total of over 1,000 rooms owned by INVESCO worth Eu160m which together with the separate hotel investment mandate with Generali Insurance, gives INVESCO Eu200m of hotel property under management.

In June, INVESCO’s commercial property research forecast that it expects property investments not to disappoint their backers over the next five years, despite declining capital growth.

Paul Kennedy, head of European Investment Research, said: “While recent returns have been dominated by capital growth from yield compression, performance over the next five years will be delivered mainly through income.”

Meanwhile, Westbridge Hospitality, the Westmont vehicle, has sold two of the 24 hotels it bought from InterContinental last year for Eu352m. The two properties, the Holiday Inn at Brussels airport and the Crowne Plaza at Antwerp, were bought by Pandox for Eu52m.

Pandox said that the acquisition meant it was now the largest owner of hotels in Brussels and Antwerp with a total room count of 1,820 and a valuation of Eu275m.

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