In the first three quarters of 2026, the German hotel investment market saw property transactions totalling 1.01 billion Euros. This represents a 33.0 per cent decrease compared to the same period in the previous year. The decline is primarily attributable to a reduced number of large-volume transactions. At the same time, the number of transactions exceeded the previous year's level, indicating continued but modified investor interest. Analysis by global real estate service provider CBRE highlights that this interest increasingly focused on smaller transactions and locations beyond the established investment centres.
Helena Rickmers, Head of Hotel Investment at CBRE in Germany, notes continued high interest in hotel properties. She explains that, given current market conditions, buyers are extending decision-making processes and scrutinising risks in greater detail. The increased yields from alternative investments raise institutional investors' demands for distributions, thereby putting pressure on acquisition prices. The prime gross yield for hotel properties with a lease agreement stood stable at 5.25 per cent at the end of the third quarter; however, a further increase is anticipated. Rickmers emphasises that yields differentiate more significantly outside the prime segment, particularly based on location, property quality and operator strength.
Shift in Lot Sizes and Regional Distribution
Investment activity demonstrably shifted towards small to medium lot sizes. Transactions in the range of 20 million to 49.9 million Euros accounted for 37.0 per cent of the nationwide volume, making them the strongest size category. In the same period last year, their share was still 21.1 per cent. In contrast, the volume of transactions from 50 million Euros upwards significantly decreased. The top 5 markets — Berlin, Düsseldorf, Frankfurt, Hamburg and Munich — together acquired 41.2 per cent of the total investment volume. Berlin led here, followed by Munich and Frankfurt. This implies that the majority of the volume was transacted outside these central markets.
The predominant investment strategy was value-add, accounting for almost 50 per cent of the investment volume. Investors continued to focus on properties where additional value creation could be generated through repositioning and active asset management. The group of asset and fund managers represented the strongest buyer group with more than a third of the investment volume, followed by real estate companies and private investors. International buyers continued to account for just over half of investment activity, with German investors remaining the largest single group and US investors gaining considerable importance.
Fundamental Support from Demand and Outlook
Demand in the German accommodation market proved stable in the first half of 2026. A total of 223.8 million overnight stays were recorded, representing an increase of 0.3 per cent compared to the same period last year, which had already marked a peak with 223.1 million overnight stays. Overnight stays by domestic guests rose by 0.3 per cent to 187.4 million, while foreign guests showed an increase of 0.5 per cent to 36.4 million. This stable demand forms a crucial basis for sustained interest in hotel investments.
For the final quarter of 2026, it will be crucial to what extent buyers and sellers can achieve a convergence of their price expectations and how quickly ongoing decision-making processes can be concluded. Helena Rickmers stresses that stable accommodation demand underpins investor interest. Opportunities are seen particularly where a tangible potential for value appreciation can be realised through repositioning and active asset management.
