European Hotel Real Estate

Private equity

European Hotels

Targeting areas of distress in the European hotel sector to unlock and create value.

Strategy differentiators

Experience

Dedicated team of hotel specialists, established and active in the market since 2011. Executed over €1.7 billion in transactions, managed 28 hotels across 8 European countries, renovated 17 hotels.

Connected

Vast network on the ground across Europe provides direct access to owners, developers, and brokers, delivering an advantage in sourcing and analyzing investment opportunities.

Knowledge

Deep understanding of hotel sector trends across Europe. Experience in strategic renovation, refurbishment, and repositioning process.

Sustainability commitment

Investing based on a commitment to minimizing assets’ environmental footprint, enhancing climate resilience, focusing on health and wellbeing, engaging key stakeholders and partners on sustainable performance, and designing and operating sustainable buildings to meet the requirements of sustainably conscious hotel guests while seeking to deliver positive financial and sustainable outcomes.

Investment drivers

The European hotel industry is poised for steady and healthy growth after a period of strong recovery, amid positive tourism demand and favorable supply/demand dynamics.

Hotel nights spent in European hotels are now above 2019 and nearly 50% above 15 years ago.

Highly fragmented market where majority of hotels are independently owned and operated, and which are operationally underperforming and historically underinvested.

Significant opportunity exists to acquire European hotels with strong operational performance and outlook, and also to acquire hotels with the opportunity to create additional value through investment in repositioning, upgrading, and rebranding.

The opportunity for investors

Hotels currently offer an attractive yield premium over other major real estate asset classes.

Hotel sector income growth has historically outpaced inflation.

Hotel real estate has shown a high degree of liquidity.

Exposure to a sector with robust underlying fundamentals—despite stress caused by the pandemic, long-term demand for hotels remains very strong, underpinning future growth.

Portfolio management

Principal Real Estate

Our European platform delivers access to diversified and sector-specific strategies. We’re able to access real-time market information, track deal flow, and understand regional market dynamics with our team of local transaction professionals across Europe and offices in the United Kingdom, Germany, France, Spain, Portugal, Italy, Luxembourg, and the Netherlands.

Learn more about Principal Real Estate

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These current views, opinions, and conclusions are subject to change. There is no guarantee that such opportunities with the hotel sector will continue, and reliance upon this information is at the sole discretion of the reader.

Past performance does not guarantee future results.

Real estate investment options are subject to risks associated with credit, liquidity, interest rate fluctuation, adverse general and local economic conditions, and decreases in real estate values and occupancy rates. International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards.

Principal Real Estate is a trade name of Principal Real Estate Investors, LLC, an affiliate of Principal Global Investors.

Footnotes