Hotel investment market: smaller transactions dominate market activity in the first nine months of 2026

- Investment volume at €1.01 billion – down 33.0 percent year on year
- More deals but considerably fewer large-scale transactions
- Value-add investments account for 48.7 percent of the volume

In the first three quarters of 2026, real estate worth €1.10 billion changed hands on Germany’s hotel investment market. Compared to the previous year’s period, this marks a decline of 33.0 percent. The lower overall volume was especially caused by the significant decline in large-scale deals. At the same time, the number of transactions considerably exceeded the level achieved in the year-earlier period. Sustained investor interest focused primarily on smaller transactions and locations outside the established investment centers. These are the conclusions currently drawn from an analysis prepared by the global commercial real estate services company CBRE.

“Interest in hotel properties remains keen. Buyers are, however, taking more time to make their decisions and are screening the risks more intensively in the current market environment. Higher returns on alternative investments are prompting institutional investors to require higher distributions, which, in turn, is putting greater pressure on purchase prices.”
Helena Rickmers, Head of Hotel Investment at CBRE Germany

At the end of the third quarter, the gross prime yield for hotel properties with lease agreements was running at 5.25 percent and had therefore remained stable. There are, however, signs of another increase. “Especially outside the prime segment, yields differ even more strongly depending on the location, property quality and how good the operators are,” Rickmers comments.

Investment activity has clearly shifted in favor of smaller to mid-sized lots. The largest size category consisted of transactions of between €20 million and €49.9 million with a share of 37.0 percent in the nationwide volume, up from 21.1 percent in the year-earlier period. By contrast, the volume of transactions of €50 million and more dropped sharply.

Taken together, the Top 5 markets of Berlin, Berlin, Düsseldorf, Frankfurt, Hamburg and Munich captured 41.2 percent of the investment volume across Germany. These markets were headed by Berlin, followed by Munich and Frankfurt. The lion’s share of the volume was therefore transacted outside the Top 5 markets.

With a proportion of just under 50 percent in the investment volume, value-add continued to be the definitive investment strategy. The spotlight remained on investors seeking to generate additional value added through repositioning and active asset management.

The strongest buyer group consisted of asset and fund managers who took share of a good one third in the investment volume, followed by real estate companies and private investors. Irrespective of this, and as before, a slim majority of the investment activity was attributable to international buyers. German buyers remained the largest single investor group, while US investors came a great deal more to the fore.

Investment market underpinned by fundamentals
The demand in Germany’s accommodation market held steady in the first half of 2026. Accommodation businesses registered a total of 223.8 million overnight stays. This increase represents 0.3 percent more than in the previous year’s period that, at the time, marked a record for a first half year at 223.1 overnight stays.

The overnight figures of domestic guests climbed 0.3 percent to 187.4 million. Growth of 0.5 percent to 36.4 million was also generated by guests from abroad. Stable demand therefore continued to form a sound foundation for promoting interest in the hotel investment market.

Outlook for the full year 2026
“How quickly buyers and sellers can find consensus on pricing and bring decision processes under way to a close will be decisive in the final quarter. Demand for accommodation maintaining a stable level is fueling investor interest. We see opportunities arising whenever feasible upside potential can be leveraged by repositioning and active management,” Rickmers says.