German investors enter Amsterdam hotel market

German institutional investors Union Investment and Deka Immobilen have bought into the Amsterdam hotel market, amid growing interest in the sector.

Union Investment bought the newly opened, 207-room Crowne Plaza Amsterdam South hotel, while Deka Immobilien has bought the 175-room American Hotel at Leidsekade 97, Amsterdam in a sale and leaseback agreement on behalf of its sister company WestInvest Gesellschaft für Investmentfonds.

With the core real-estate market yet to recover from the sub-prime crisis institutional investors are increasingly interested in niche real-estate investments.

In 2011 BNP Paribas Real Estate invested in hotel chain Hipark’s venture to construct a new hotel in Marseille, and built 26 student accommodation blocks in Isle-de-France, in its no frills Studélites business line. On March 12 LaSalle completed a deal to purchase and fund the construction of ‘The Quadrant’, Watkin Jones’s 328 student bedroom development in London.

Savills in the Netherlands, which oversaw the purchases, expects Amsterdam to be a hot spot for hotel investment in 2012. The city has high occupancy rates and expects increased tourist activity following the opening of the London-Amsterdam Eurostar service.

Clive Pritchard, head of Savills in the Netherlands, said: “The hotel market is well supported by the Municipality of Amsterdam. Speaking to operators at the international hotel conference in Berlin earlier this month many are looking for opportunities to enter the Amsterdam hotel market or to increase their market share.”

“We expect investors would be prepared to pay a premium for city centre hotels which rarely come up for sale. International banks are still cautious but will provide financing for viable hotel investments.”

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