The situation of investment in hotel assets needs to be contextualized relative to other asset classes which vary in investor favor based on expected returns and medium to long-term outlooks. Traditionally, major players in the sector such as Unibail-Rodamco-Westfield, Gecina, Klépierre, Covivio, or Société Foncière Lyonnaise, aim to diversify their portfolios among office real estate, commercial real estate, residential real estate, including managed residential segments (tourist residences, student, senior living, coliving); and hotel real estate.
In the first half of 2024, the total investment in residential assets in France was €1.6 billion, marking a 12% increase from the first half of 2023. However, the pace has significantly slowed in the second quarter of 2024, showing an overall decline of 4% from the same period in 2023, reaching €806 million. While traditional residential assets have held up, transactions on managed residential assets have seen a decrease of 29% from the first semester of 2023, totaling only €312 million.
It appears that money has either been placed elsewhere or remained unutilized. Certainly not towards office real estate which has recorded, in France, a total investment volume of €5.9 billion in the first semester of 2024, down 28% from €8.2 billion in the first semester of 2023, and well below the ten-year average of €11.3 billion (Study by BNP Paribas Real Estate).
In France as in Europe, office real estate is in a bad position. Commercial real estate is not in much better condition, despite some bubbles keeping it afloat. According to data from BPCE Solutions Immobilières and BNP Paribas Real Estate, transactions on commercial properties in the first half of 2024 have collapsed. They did not reach one billion euros over six months, compared to €3 billion over the whole year of 2023. And it would have been even worse if investment in shopping centers did not support the market (nearly two-thirds of transactions). The commercial market is in a state of expectation, summarize observers.
Slowdown continues in 2024 with a decline in trading by 5%
At a European level, the situation is not much more promising. In 2023, according to BNP Paribas Real Estate, the office real estate market recorded the most significant decrease in invested volumes among all asset classes. The slowdown continues with a...
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