MR 2018

66

Copenhagen Property Market Report 2018

Key transactions, Copenhagen hotels

Hotel name

District

Seller

Buyer

Sqm Price*

Yield**

AC Hotel Bella Sky

Copenhagen S

Bella Solstra

Wenaasgruppen

41,834 1,600

4.75%

ATP Ejendomme/ PensionDanmark AP Pension and KEVA

Marriott

CBD

Bella Solstra

25,866

1,100

4.50%

Comwell Trælastholmen, Nordhavn Hotel Plaza, Mercur Hotel, Hotel Richmond & Star Hotel***

Nordhavn

KPC

25,145

775

5.00%

CBD/Copenhagen V Hotel Property Group Balder

29,308

760

na

Quality Airport Hotel Dan

Airport

European Properties Midstar

10,491

265

5.60%

Grand Hotel

CBD/Copenhagen V Arp-Hansen Group Midstar

7,145

225

na

Bertrams Guldsmeden

Copenhagen V

na

Thylander Gruppen

1,618

55

na

Note: *) Prices quoted in DKK million (rounded figures) **) Yield in this context denotes estimated yield (approximate figure) ***) Portfolio sale

Source: Sadolin & Albæk.

Strong appetite for hotel property investments Strong hotel market performance and mounting demand from operators and investors alike have driven down yield requirements in recent years. While yields are downtrending on hotels let on fixed lease agreements with long non-terminability, investors are more averse to investing in more cyclical hotel assets let on management agreements.

AC Hotel Bella Sky

In Copenhagen, yield requirements therefore largely hinge on the operator and the structure of the lease agreement of the individual hotel property.

In 2017, we saw the biggest single-property hotel transaction recorded in Copenhagen as the AC Hotel Bella Sky was acquired by Norwegian investor Wenaasgruppen.

Brisker transaction activity provides a more liquid market. Accordingly, with the increasing number of institutionals entering the hotel segment, the hotel property investment market will become more mature and transparent. Provided the outlook for this market segment continues to be bright, investors may start treating hotel investments more like infrastructure investments. As a result, they will impose higher demands on hotel operators but also invest more readily in hotel assets let on management agreements.