Europe -  Berlin, Germany

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With some 3.6 million inhabitants, Berlin is the largest city in Germany and regarded as a city of knowledge and culture. It is home to some of the most prominent universities, sporting events, orchestras and museums. The rapidly evolving metropolis enjoys an international reputation for its festivals, contemporary architecture, nightlife and avant-garde arts. A major tourist centre and home to 190 nationalities, Berlin is a focal point for individuals attracted to its liberal lifestyle, urban eclecticism and artistic freedom.

Over the past couple of years, Berlin has experienced impressive growth in visitation, airport passengers, hotel supply and performance. Figures indicate a positive trend with a compound annual growth rate of around 3.5% in visitation from 2013 to 2019, mainly thanks to an increase in international visitation which grew by an average annual compound rate of around 4.2% over the same period. The city benefits from a strong MICE market, but its largest segment is leisure guests. Owing to its strong focus on creative industries, start-ups and the student population, the city’s profile attracts a young and international crowd.

Berlin recorded healthy growth in RevPAR from 2013 to 2019, averaging an annual increase of around 3.0%. This was mainly driven by an increase in occupancy, which grew from a little above 70% in 2013 to just below 80% in 2019. Over the same period, Berlin’s average rate experienced somewhat slower growth, averaging around a 1.5% increase. In 2020, the market experienced a severe decline in RevPAR on the back of the COVID-19 pandemic. Most of the hotels remained closed throughout the year, with the exception of January and February prior to the pandemic and a short summer period.

Berlin is expecting to see a new-supply increase of around 10% of the existing rooms in the next couple of years, most of which will fall into the midscale and upscale classes (over 70%). Some notable future openings include the 167-room Locke at East Side Gallery, opening at the end of 2021; the 284-room prizeotel Berlin-City, due to open in 2022; the 177-room Holiday Inn Express Berlin – City Ku'Damm, due to open at the end of 2022; and the 446-room MOXY Central Tower Berlin, due to open at the beginning of 2023.

Surprisingly, Berlin’s transaction activity increased by 20% in 2020, compared to 2019, with an equal distribution between single assets and portfolio deals. The most notable transactions include the takeover of TLG Immobilien AG by Aroundtown, which includes three hotels with a combined room count of 795 for around €100,000 per room, and the sale of the 304-room nhow Berlin as a single asset deal.

As a result of the pandemic and the significant downturn in travelling all across Europe, hotel values in Berlin decreased by just below 12% in 2020. Looking forward, Berlin is in a good position to recover swiftly owing to its strong leisure demand and good mix of domestic and foreign visitation. Furthermore, the long-anticipated new airport, Berlin Brandenburg, opened at the end of 2020, further facilitating access to and from the city.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)