Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
Russia's biggest demonstrations since 2011 in protest against Navalny jailing
Opposition activist Navalny's call for mass protests a success as thousands take to the streets across Russia
Russia's National Welfare Fund accounts for almost 12% of GDP
Police arresting activists ahead of Saturday’s demonstration in support of Navalny
NBU keeps key policy rate at 6%, worsens CPI outlook
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
Albania needs reforms for e-commerce to thrive, says World Bank
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Retailers and restaurant owners threaten protests in Bulgaria if reopening is delayed
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegrins say state administration is most corrupt institution
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
Private finance mobilised by development banks up 9% to $175bn in 2019
OUTLOOK 2021 Romania
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s Khamenei menaces private citizen Trump with image of aircraft shadowing blond golfer
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
More...
Almost €2bn worth of deals were expected to close in the hotel sectors of six Central and Southeast European countries this year, but as the coronavirus (COVID-19) pandemic causes shutdowns across the region, these are looking increasingly unlikely to complete in the immediate future, says a new report from international law firm CMS.
The crisis struck as the hotel market in the six countries — Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia — had become increasingly sophisticated and seen a ramping up in investment.
By 2019, says the CMS report, “ the CEE6* markets were rapidly catching up with their western neighbours, both in terms of investment volumes and sophistication”.
Between 2015 and 2019 transactions amounting to a total of €4.2bn closed in the six countries, almost half the volume recorded over the last two decades. Most of these were in capital cities, where 72% of total hotel transactions took place.
The volume was set to increase further this year to around €2bn, up from €1.4bn in 2019, during which 55 hotels in the region with more than 10,000 rooms changed hands. The largest single deal was the acquisition of the InterContinental Prague for €225mn.
Some deals amounting to around €297mn have already completed early in 2020, and some investors are continuing with acquisitions and due diligence. However, the completion of most major deals already in progress “is becoming more unlikely due to the growing COVID-19 pandemic”, according to the report.
“2019 saw transaction volumes rise to their highest ever level and our initial expectations for 2020 were even stronger. However, this optimism has been severely tempered by the international outbreak of COVID-19, which is putting the tourism sector and global economy under increasing pressure,” commented Lukas Hejduk, CMS partner and head of hotels & leisure in CEE.
“We now find ourselves in a situation where it is increasingly difficult to predict the full impact on the hotel sector across CEE.”
Looking at the reasons behind the robust M&A in 2019, the report identifies higher yields than in the established West European market, and the long-term growth potential in the CEE markets.
In the economically more advanced capitals of the Visegrad 4 countries, notably Prague, Budapest and Warsaw, yields are approaching those in Western Europe at around 5-6%, data from Cushman & Wakefield shows. However, they remain higher in Southeast Europe at 7-7.5% in Bucharest and Sofia.
CMS also noted city and country-specific factors "such as Warsaw’s robust commercial development and the decreased VAT rate for hotel accommodation in Hungary and Slovakia”.
The largest volume of hotel transactions took place in the Czech Republic at €620, followed by Poland (€391mn) and Hungary (€285mn). Deal value in the remaining three states was below €100mn during the year.
The most sought-after assets for investors in the sector were upper-midscale and upscale hotels, which accounted for 42% of transacted volume during 2019.
The increased demand resulted in growing competition for assets in 2019, and increasing diversity of buyers. While European investors dominated the CEE market in 2019, accounting for 84% of hotel purchases, there was growing interest from buyers from Israel and South Korea.
Register here to continue reading this article and 5 more for free or purchase 12 months full website access including the bne Magazine for just $250/year.
Register to read the bne monthly magazine for free:
Already registered
Password could contain only a-z0-9\+*?[^]$(){}=!<>|:-_ characters and have 8-20 symbols length.
Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.
Forgotten password?
Email field can't be empty.
No user with this email address.
Access recovery request has expired, or you are using the wrong recovery token. Please, try again.
Access recover request has expired. Please, try again.
To continue viewing our content you need to complete the registration process.
Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.
If you have any questions please contact us at sales@intellinews.com
Sorry, but you have used all your free articles fro this month for bne IntelliNews. Subscribe to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free subscription to bne's digital weekly newspaper to subscribers to the online package.
Click here for more subscription options, including to the print version of our flagship monthly magazine:
More subscription options
Take a trial to our premium daily news service aimed at professional investors that covers the 30 countries of emerging Europe:
Get IntelliNews PRO
For any other enquiries about our products or corporate discounts please contact us at sales@intellinews.com
If you no longer wish to receive our emails, unsubscribe here.
Magazine annual electronic subscription
Magazine annual print subscription
Website & Archive annual subscription
Combined package: web access & magazine print annual subscription