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Check in to Germany – “hot spot” for international hotel investors
April 3, 2013Article by Ray Withers
For any Economist readers out there, the front cover of this week’s edition depicting the sinking ship of Cyprus pretty well sums up the belief of many investors that Europe remains in trouble, real trouble.
With some set to lose up to 60% of their savings and fears that such drastic and quite frankly frightening measures could be taken by other European countries vulnerable to Merkel’s bailout conditions (Spain, Italy, Greece etc), it does make you wonder if the bank remains the safest place for your money?
Of course here in the UK we are fortunate that our savings up to £85,000 are protected by law but with our still regularly contested Eurozone membership not to mention rumours of negative interest rates, many of my friends, family, colleagues and indeed clients are looking elsewhere to put their hard earned cash.
But where? Stocks? Bonds? A pension? Under the mattress? For me personally I’ve for many years been an advocate for the merits of investing in good old-fashioned bricks and mortar, a tangible asset which if carefully selected should increase in value and generate an income.
“So, where would you invest?” A question I get asked all the time, well as a believer that the fundamentals of any market make it attractive or not, I would in fact, and don’t call me crazy, invest in Europe. Germany to be more precise.
And I’m not alone, attracting investors from all over the world due to its solid economic performance, prudent fiscal measures and a growing tourism industry, the German hotel market in particular has become a hot spot.
We may well now be 5 long years into one of the worst recessions seen in living memory but is seems that one thing people aren’t prepared to forgo are holidays. At a global level hotel bookings and rates in February 2013 rivaled or outperformed those of the same month in 2012 according to Pegasus Solution with year-to-date bookings for both leisure and corporate channels surpassing those seen pre-downturn.
This trend has been echoed in Germany, already a top 10 global tourism destination in its own right. Forecast to achieve 80 million overnight stays by 2020, demand for hotel accommodation is on the rise and driving construction with many international hotel chains announcing new project plans. By the end of 2013, more than 130 new properties will open their doors to guests, 75 in Bavaria alone according to data from TOPHOTELPROJECTS.
Demand not only from German nationals themselves but their European neighbours including us Brits and increasingly from the Far East (China, Japan, India, Malaysia) has boosted the nation’s tourism market markedly. And with over 60% of visitors preferring to stay in hotel accommodation, investment opportunity is plentiful.
Take our latest hotel room investment, AlpenClub for example. Located in the Bavarian town of Schliersee, the 4* AlpenClub enjoys super 4.5 / 5 guest reviews on TripAdvisor and forecasts occupancy levels of over 70%. Managed and run by an internationally renowned hotel operator with strong connections in the Far East, AlpenClub is fully operational and open for investment.
Offering 10 year contracted returns and a 10.33% average NET yield, the 18m2 plus rooms have proved a hit with our clients, so much so in fact that over 60% of rooms have now been sold.
Maybe it’s the low entry point of £44, 950 (with prices fixed in £, $ or €), the hotels’ proven 40-year track record, the fact that Bavaria is the most popular tourism location in Germany or simply the double-digit assured returns but one thing’s for sure, savvy investors can see that the fundamentals add up, even if it is in Europe.
For more information and your exclusive free Investment Guide packed with market insight and breakdown of the deal, call us today on +44 1865 202 700 or email firstname.lastname@example.org.