Q1 2018

Newsletter Q1 2018

A popular alternative
Traditionally, investors have perceived hotel real estate as an alternative asset class. But of all the different alternative assets, hotels are among the most popular. In a recent PWC poll, the share of investors interested in hotel real estate reached 28%. The investment volume in hotels and the share taken by hotels in the total volume of real estate investment has significantly increased in recent years.
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Investment geography – focus on Britain, Spain and Germany
In 2017 three countries - Britain, Spain and Germany - accounted for almost two-thirds of the total volume of hotel real estate investment. This distribution depends on numerous factors – changing asset prices, market size, real estate quality, legislation, regulation, etc.
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High yield, low risk
Yields on hotel assets remain higher than those on office and retail real estate. Often the valuation of such assets is performed simply by adding a premium of 1-2% to the capitalisation rate for offices. At the same time, only business tourism can be directly connected to the dynamics of the office market.
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Customer diversification – the key to industry stability
The main reason for the hotel real estate stability is the significant geographical diversification of tourist traffic. Hotel guests, on average, have fewer connections to the local economy than tenants of offices and retail spaces.
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The role of specialised funds in hotel real estate
Specialised funds have always played an important role in the real estate market. They account for a smaller proportion of transactions, but since they have greater expertise they affect the prices of more complex assets and overall market efficiency. This is especially important for hotel assets as the product’s complexity...
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The impact of the internet and the joint consumption economy
Traditional classes of commercial real estate are facing changes as the lifestyle of consumers changes. For example, online shopping has had a significant impact on retail real estate and more people working from home has affected office real estate. For the hotel market, greater flexibility in customers’ work schedules is more likely to have a positive impact.
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Expectations – rising rates
Over the last few years, the potential risk of money market rate increases and the accompanying growth in capitalisation rates has become a concern for investors in European real estate. Accordingly, investors have begun to shift the focus of their investments towards high-yielding strategies.
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VIYM news Q1 2018
First residence in Davos was sold in March 2018
SMS Group confirmed the high level of NPO "Akhtuba" technical capabilities
Hard Rock Hotel Davos included in NEWH’s Top Interior Design 2018 list
The commencement of an infrastructure component at Antognolla
Gloriette’s Residences continue apartment sales
French Kiss plans to renovate and reconstruct stores’ interior in 2018
Hard Rock Hotel Davos improves international recognition
Austria Trend Hotels extend franchise cooperation with Radisson Blu
PE news Q1 2018
PE Online education platform Skyeng attracts investment from Baring Vostok at $100 million valuation
Strategic ADM acquires a 50% equity stake in the sweeteners and starches business of Russia-based Aston Foods and Food Ingredients
FDI Enel Russia and Rostov Region Develop Cooperation in the Sphere of Wind Energy
FDI Hochland is investing in the development of production in Russia
FDI Nestle will invest 1.5 billion rubles in modernization of coffee production in Kuban
FDI Mars invests in the local production development in Moscow, Uljanovsk and Novosibirsk regions
FDI Tikkurila to invest 2.4 billion rubles in a decorative and industrial paints plant in Leningrad Oblast
FDI French SNF will invest about 3.5 billion rubles in the Saratov Region
FDI Honeywell International of the USA will open a plant in the SEZ "Lipetsk"
Hotels Second Hilton hotel worth 1.3 billion rubles will be built in Krasnodar
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VIYM #13 Anastasia Dagaeva: about aviation, piloting and Elon Musk / D. Schuetzle (in Russian)
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