April 9 (Bloomberg) -- Sales of German hotels rose 44 percent in the first quarter as foreign investors sought safe investments in Europe’s largest economy, CBRE Group Inc. said.
About 605 million euros ($788 million) of hotels changed hands, up from 420 million euros a year earlier, the Los-Angeles based broker said in a statement today. The February acquisition by Israel’s Fattal Hotels Company Ltd. of 20 Holiday Inn, Best Western and Queens Hotels properties accounted for about half the total.
“Due to favorable financing conditions, Germany’s status as a safe haven, and increased demand from foreign investors, we believe 2013 will be a strong year for hotels,” said Frederik Schwaeppe, associate director of CBRE’s hotel brokerage in Germany.
Germany’s economy is growing more than those of most other European countries, attracting investors as interest rates in the region hover near record lows. Prime hotels offer net initial yields of more than 5 percent, Schwaeppe said. A German 10-year government bond yields about 1.3 percent.
Investment volumes this year will probably exceed 2012’s level, Jones Lang LaSalle Inc. said in a separate statement. Investors are particularly interested in upscale and budget hotels, the Chicago-based broker said.
CBRE estimates that 1.36 billion euros of hotel deals were completed in Germany last year.
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