In the first three quarters of 2026, property transactions totalling 1.01 billion euros were recorded on the German hotel investment market. Compared with the same period last year, this represents a fall of 33.0 per cent. The main factor behind the lower total volume was, in particular, the significant decline in large-scale deals. At the same time, the number of transactions was well above the previous year’s level. Sustained investor interest focused primarily on smaller transactions and locations outside the established investment centres. These are the latest findings from an analysis by the global property services firm CBRE.
“Interest in hotel property remains high. However, in the current market environment, buyers are taking more time over their decisions and assessing the risks in greater detail. Higher returns on alternative investments are increasing the distribution requirements of institutional investors and, consequently, the pressure on purchase prices,” says Helena Rickmers, Head of Hotel Investment at CBRE in Germany. At the end of the third quarter, the gross prime yield for hotel properties with a lease stood at 5.25 per cent and thus remained stable. However, a further rise is on the horizon. “Particularly outside the prime segment, yields are therefore varying even more significantly depending on location, property quality and the strength of the operator,” says Rickmers.
Investment activity shifted significantly towards smaller to medium-sized deals. Accounting for 37.0 per cent of the nationwide volume, transactions between 20 million and 49.9 million euros constituted the largest size category. In the same period last year, their share had stood at 21.1 per cent. By contrast, the volume of transactions of 50 million euros or more fell significantly.
The top five markets – Berlin, Düsseldorf, Frankfurt, Hamburg and Munich – together accounted for 41.2 per cent of the nationwide investment volume. Within these markets, Berlin led the way, followed by Munich and Frankfurt. This means that the majority of the volume was generated outside the top five markets.
Value-added remained the dominant investment strategy, accounting for just under 50 per cent of the investment volume. The focus continued to be on investors seeking to generate additional value through repositioning and active asset management.
The largest group of buyers were asset and fund managers, accounting for just over a third of the investment volume. They were followed by property companies and private investors. Regardless of this, international buyers continued to account for just under the majority of investment activity. German buyers remained the largest single group of investors, whilst US investors gained significantly in importance.
Fundamental data underpin the investment market
Demand in the German accommodation market remained stable in the first half of 2026. In total, accommodation establishments recorded 223.8 million overnight stays. This was 0.3 per cent more than in the same period of the previous year, which, at 223.1 million overnight stays, had marked the previous record high for a first half-year
The number of overnight stays by domestic guests rose by 0.3 per cent to 187.4 million. For international guests, the figure increased by 0.5 per cent to 36.4 million. Stable demand thus continues to form an important basis for interest in hotel investments.
Outlook for the full year 2026
“For the final quarter, the decisive factor will be how quickly buyers and sellers can agree on prices and bring ongoing decision-making processes to a conclusion. Stable demand for accommodation is supporting investor interest. We see opportunities in particular where there is clear potential for value appreciation through repositioning and active asset management,” says Rickmers.
