Is European hospitality the one to watch?
GRI Club Europe
High-level content and networking, shaping the present and future of the real estate market
The hospitality sector, once considered niche, has now emerged as a central focus in European real estate, as was reiterated in conversations among the industry’s key market players at this month’s Europe GRI 2024.
This sentiment was also mirrored in recent data from Cushman & Wakefield, revealing that European hotel transactions reached a five-year high in the first half of 2024.
🔹 This substantial pick-up in transactions proves not only confidence in the hotel sector, but pricing alignment between sellers and buyers - something hard to come by in today’s European real estate market.
More and more institutional investors are looking to deploy into the hospitality sector. GRI Club member insights show that equity investors are drawn to the potential to create value through rebranding, refurbishing, and operational improvements, while debt investors may seem cautious but are willing to finance well-managed assets.
🔹 This does not deny the increasing complexity of the sector, however, with high CapEx costs driven by prime location prices, strict ESG requirements, evolving guest experience demands, and varied operational models.
Careful navigation of the market is needed to scale up in such a competitive environment, and other concerns recognise that the growth phase for this asset class may have peaked.
The hospitality sector will take centre stage for a full day of discussions and senior networking with the industry’s most prominent figures at GRI Hospitality Europe 2024, on 6th November in Madrid, with discussions touching on: pricing, growth, prime vs secondary urban assets, resorts & leisure, the luxury sector, ‘flex’ models, deal structures, value-add strategies, and more.
Europe’s cautious optimism vs India’s “aggressive optimism”
The cautious “wait-and-see” approach persists in European real estate investment, and although a slight pick-up in transactions is stirring optimism among market players, one cannot deny that the overall sentiment largely contrasts that of investors in the Indian real estate market.
🔹 Indian market players are displaying an “aggressive optimism”, in the words of Kunaal Shah, Partner at Trilegal, during his exclusive interview with Gustavo Favaron, CEO & Managing Partner of GRI Club, at Europe GRI 2024.
India is projected to be one of the fastest growing economies in the medium term, and prime minister, Narendra Modi, aims to make the country a developed nation by 2047.
Among the critical factors in achieving this ambitious target is the extensive development of the country’s infrastructure, as was reiterated by Kunaal Shah in his interview.
🔹 Kunaal describes a clear understanding within the country that development cannot solely depend on domestic capital to achieve the level of growth required in both the real estate and infrastructure industries.
This understanding is supporting the path for many foreign investors into the country’s real estate market. Historically, international investors faced challenges including identifying the right local partners, understanding regulatory quagmire, and navigating cultural differences.
Today, a move towards quality, increased standardisation, and a digital revolution have enhanced transparency and tackled both corruption and inequality.
🔗 Watch the full interview with Kunaal Shah offering an expert and profound first-hand look into the foreign investor landscape in India HERE.
Exclusive interviews with key market figures from ING and Swiss Life
GRI Club is excited to be sharing a number of exclusive interviews with key market players which took place during Europe GRI 2024.
🔹 This week, ESG in the real estate industry took centre stage, as Bruno Blavier, Head of ESG Real Estate at Swiss Life Asset Managers, describes the growing expectations from all stakeholders, and the misalignment between lenders and other market players behind the importance to be put on EU taxonomy versus other measurables.
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Meanwhile, Alexander Piur, Head of Innovation and Sustainability at ING, addresses the importance of new construction in reaching net-zero goals, however reminds us that it isn’t on the shoulders of the real estate industry alone, but also the energy sector.
“We will always have energy consumption in buildings; it will never be zero. So, we need to make sure that the energy we consume is renewable,” explains Alexander.
Watch this space for more exclusive interviews published in the coming weeks with senior representatives from Goldman Sachs, BentallGreenOak, JLL, MSCI, Hammerson, and more!
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