Dublin, Milan and Madrid top the rankings of European ‘hot’ cities for hotel investment according to new research by international real estate advisor Savills. The new analysis has ranked cities according to their underlying operational performance fundamentals and relative value.
The firm has compiled a list of the top 10 European cities for hotel investment based on factors including the overnight visitor market, GDP and employment growth forecasts, stock levels relative to demand and indicative prime yields as of Q1 2017. The top 10 are markets where the prospects for income security alongside capital preservation and capital growth look robust going forward.
Tim Stoyle, head of hotels valuation at Savills, comments: “The analysis highlighted there are still a number of cities in Europe that offer good ‘value’ prospects in light of the outlook for operational performance going forward. Top ranking Dublin for example has been one of the best performing European cities in terms of RevPAR (revenue per available room) growth over recent years which looks set to continue as new development remains constrained.”
Rob Stapleton, director in the hotels team at Savills, comments: “Across Europe we are seeing increasing interest from investors looking for both the income and capital value growth provided by hotels. Dublin has experienced a recent rise in institutional investment whereas markets like Milan and Madrid being driven by private equity investors and owner-occupiers looking for hotels with both development and income growth potential.”