Case Studies - Christie + Co

Case Studies - Christie + Co


Business Outlook



International Managing Director’s overview 04

Services throughout the hotel life-cycle 05

International offices 07

Austria and Central and Eastern Europe 09

France 10

About Christie + Co

Christie + Co is the pre-eminent

hotel property adviser, employing

a team of specialist agents and

advisers across a network of 25

offices. We pride ourselves on

our ability to respond rapidly to

requests for honest, reliable advice.

Christie + Co is regulated by RICS

and employs registered valuers

and specialist chartered surveyors

across the business.

Germany 12

Middle East and North Africa 14

The Nordic Region, Russia and the Baltic States 16

Spain 18

+ We specialise in the hotel sector and can

always be relied upon to provide advice

that’s honest, credible and dependable.

+ We’re approachable, straightforward

and always deliver tailored solutions to

suit clients’ needs.

+ We understand what’s happening at

a market-specific level — we inspect

around 3,000 hotel businesses for sale

or valuation purposes each year.

+ We employ both property experts

and sector specialists with practical

operational experience, so our advisory

teams are well placed to provide

reliable advice.

+ We are regulated by the Royal

Institution of Chartered Surveyors and

complete more than 2,500 “Red Book”

valuations each year.

+ Our extensive network of offices

enables us to undertake large portfolio

and cross-border projects and meet

demanding timescales.


International Business Outlook 2012

Chris Day

International Managing Director

“ Anyone who seeks professional advice needs to be

confident that the guidance they receive is informative

and reliable. At Christie + Co, we are always mindful of

the need to provide services that meet clients’ needs and

reflect the market conditions. Our experts fully understand

how hospitality businesses operate and are well placed to

provide practical solutions.”


Our services

Christie + Co offers a comprehensive

range of services including:

+ Valuations for a variety of purposes

including loan security, company

accounts, mergers and acquisitions

and apportionments.

+ Market and feasibility studies,

development advice and operator

search and selection.

+ Disposal advice and brokerage.

+ Property advice on leases, management

contracts and rent reviews.

+ Arbitration, dispute resolution

and expert witness advice.

+ Advice related to distressed

assets and the identification

of business recovery solutions.

+ Performance benchmarking and advice

on non-performing assets.

Services throughout

the hotel life-cycle

Christie + Co offers a comprehensive range of services

to support hotel businesses throughout their life-cycle.

+ Advice to debt providers

+ The identification of business

recovery solutions

+ Valuation for marketing purposes

+ Preparation of sales memoranda

+ Disposal advice and brokerage

+ Rent reviews

+ Arbitration, dispute resolution

and expert witness advice

+ Litigation support

+ Capex appraisal

+ Valuation for accounting purposes

+ Loan security valuations

+ Advice relating to non-performing

or distressed assets

+ Opportunity identification

+ Market, feasibility and impact studies

+ Deal origination and buy-side advice

+ Site sourcing and development deals

+ Operator search and selection

+ Forward sales

+ Valuation for acquisition purposes

+ Commercial due diligence

+ Acquisition brokerage

+ Strategic and business advice

+ Performance analysis and benchmarking

+ Operational reviews

+ Management contract and lease advice


International Business Outlook 2012

Jeremy Hill

Director and Head of Hotels

“ We have built a strong team of in-country

professionals to provide our clients with

the advice and support they need. In a

challenging market it is important to take

a realistic approach and seek the most

informed guidance. That’s why our clients

can always count on Christie + Co to

provide advice that’s pragmatic, honest

and credible.”


Andreas Scriven

Director and Head of Consultancy

“ Advice that combines data and

research is readily available, but the

simple compilation and delivery of

information does not create maximum

value. Christie + Co’s international

consultants focus on delivering

bespoke, implementable solutions that

create, retain, or recover value for

our clients.”

International offices


T: +34 (0) 93 343 6161



T: +49 (0) 30 / 20 00 96-0



T: +971 (0) 4 434 8444



International offices


























T: +49 (0) 69 / 90 74 57-0



T: +358 (0) 9 4137 8500



T: +44 (0) 20 7227 0700



T: +33 (0) 4 72 91 30 50



T: +33 (0) 4 91 29 12 40



T: +49 (0) 89 / 2 00 00 07-0



T: +33 (0) 1 53 96 72 72



T: +33 (0) 2 99 59 83 30



T +43 (0) 1 / 8 90 53 57-0



International Business Outlook 2012


Austria and Central

and Eastern Europe

Middle East

and North Africa


The Nordic Region, Russia

and the Baltic States



Austria and Central

and Eastern Europe

Transaction volumes in the Austrian hotel

investment market increased in the first half

of 2011 to over ¤200 million. Some significant

transactions also took place in the third quarter.

Two major corporate portfolio transactions were

the primary contributors: one being the sale

of the 458-room InterContinental Vienna, sold

as part of a portfolio of seven hotels in Europe

by Morgan Stanley Real Estate to the Lebanese

businessman Toufic Aboukhater.

The sale of the NH hotels at Vienna Airport

and in Salzburg also contributed decisively,

along with a further three hotels in Germany,

which were sold by the Spanish hotel chain

NH Hoteles to Invesco Real Estate.

Individual transactions accounted for a lesser

share in the first half-year, dominated first and

foremost by the sale of two 4-star hotels in

Vienna. However, there were also two significant

individual transactions in the second half of the

year. In the first, Hypo Alpe-Adria-Bank AG sold

the Schlosshotel Velden at Lake Wörthersee

for an estimated price of ¤50 million to Karl

Wlaschek. The second saw the 140-room Hotel

Bristol (situated opposite the Vienna State Opera

House) sold to Elisabeth Gürtler, owner of the

renowned Hotel Sacher, in September.

Private equity companies are also returning to

the market, not just as vendors but as buyers

too. Moreover, high net worth individuals are

dominating the scene. Traditional institutional

investors, on the other hand, appeared more

reluctant to transact in the hotel sector in the

first half of the year.

In Central and Eastern Europe the hotel

transaction market developed far more

modestly in the majority of countries, with

a positive performance in only a few, most

notably Poland.

As in the rest of Europe, investors are

migrating to quality, looking for trophy assets

in good locations, at a reasonable price. For

the most part, major transactions tended to

satisfy these criteria.

The Four Seasons Gresham Palace in Budapest

was acquired in November by a sovereign

wealth fund from Oman. Similarly, the Radisson

Blu in Tallinn, Estonia was bought in the course

of a restructuring process by Event Hotels.

Other examples include the Le Méridien Bristol,

as well as the Sobiesky in Warsaw. The former

was sold by Orbis and Starman, and the latter

sold by Warimpex to the Norwegian high net

worth individual Lars Weenas.

With the increasing pressures faced by banks,

we expect further transactions in the Central and

Eastern European region in 2012. There will also

be, in our opinion, more transactions in Austria,

with Vienna leading the way. Many investors

remain on the hunt for attractive investment

opportunities in the Danube metropolis.

Lukas Hochedlinger

Director, Austria

Case Studies

Analysis of the Vienna, Salzburg

and Linz hotel markets

On behalf of the Austrian Hotel Association,

Christie + Co carried out an analysis of the

hotel markets in Vienna, Salzburg and Linz.

This included providing an understanding of the

historical development of supply and demand

in order to give a forecast for the future market

potential. A particular focus of the analysis was

on the possible consequences that additional

supply could have on occupancy rates and prices.

Valuation of two 5-star hotels

in Prague

The financing bank of two 5-star hotels

in the Czech capital of Prague instructed

Christie + Co to value both properties.

The valuation was prompted by strong

competition in Prague, due to new hotels

opening, coupled with a decline in demand.

Marketing of a 4-star seminar

hotel in the Greater Vienna area

Christie + Co was instructed by an insolvency

administrator to sell a seminar hotel in the

Greater Vienna area. The 4-star hotel has over

100 rooms, several conference rooms and a

restaurant, as well as a fitness room. Until

recently it was operated by an international

chain. Christie + Co is conducting the sale of the

hotel in a structured bidding process.


International Business Outlook 2012


Transactional market in progress

Since the final quarter of 2010, France

has experienced a real recovery in the

transactional market compared with the two

previous years. Although the economic crisis

is by no means over, the mid and corporate

markets both show optimistic signs. Hotel

transaction volumes were forecast to reach

¤2 billion by the end of 2011.

Corporate activity demonstrates

high demand

Significant corporate sales were realised in

2011. Major transactions included the Marriott

Champs Elysées for ¤240 million, the Louvre

Hotels Group portfolio of 33 hotels for ¤173

million (including refurbishment costs) and the

bricks and mortar sales of Accor hotels owned

by La Foncière de Murs for ¤133 million.

French assets, especially portfolios, continued

to attract institutional investors and

foreign funds in 2011. We believe this trend

demonstrates a revitalisation of the hospitality

sector in France.

Mid-market improvement

Over the first half of 2011, the number of

transactions below ¤10 million continued to

increase despite the wider economic problems

and restrictive modernisation programmes

imposed by French regulations.

Individual buyers retained a close eye on

profitable hotels and focused on properties

with 40 bedrooms or more. They also gave

priority to assets situated in the centre of

major cities such as Paris, Lille, Lyon and

Marseille. Properties with less than 30


bedrooms, located in outlying areas and

subject to seasonal demand fluctuations were

consequently neglected. These properties

represent about 54 per cent of the hotel stock

in France.

Profitability has become the top priority,

leaving less and less space for impulse

acquisition. The share of personal capital

involved is higher in most operations, unlike

the two previous years.

Busy year for the French

hotel industry

During the first half of 2011 the French market

proved to be one of the most dynamic thanks

to strengthening customer demand. As a

consequence of the ‘Arab Spring’, customers

sought ‘more reassuring’ European destinations.

Once again, visiting tourist numbers reached

a new peak in France in 2011 and the trading

performances of French hotels during the

year were excellent. The cumulative average

occupancy among all categories over the first

half of 2011 was 66.4 per cent (an increase of 3.6

points compared to June 2010) — a trend that

continued in the second half of the year.

The 4-star hotels took full advantage of the

recovery with an increase in their occupancy

rate of 4.3 points by the end of August 2011,

reaching an average of 73.4 per cent. The

recovery was felt in all hotel categories,

however, with increases of 2.2 points in

0/1-stars, 5.0 points in 2-stars and 2.6 points in

3-stars (source:

Good financial health of the

French hotel market

On the whole, hotels in France in 2011

demonstrated their capacity to resist distress

in a context where anxiety prevailed. This

good health directly impacted on sale prices

and vendors drew maximum benefits from

their properties.

Investing in the French hotel industry presents

many advantages beyond the attractiveness of

the sector. Hotels are considered solid assets,

able to resist challenging times and economic

and financial crisis. Cities focusing on both

business and leisure tourism offer the best

investment opportunities.

Market orientation

With buyers’ interest increasing steadily,

Christie + Co’s team across France observed

that vendors did not feel pressured into selling

their properties. The investment capacity of

individual and institutional buyers remained solid.

Funding remained a problem, with traditional

buyers of larger units facing real difficulties in

financing projects exceeding ¤50 million. In a

tough environment, our consultancy services

added real value to investors’ and operators’

decision-making processes.

In conclusion

Hospitality is a dynamic bull market as far

as prices in France are concerned. The hotel

sector offers secure investments that remain

more profitable than other investment vehicles.

The market is steady and not affected by large

upward or downward variations. Therefore,

it retains its position as a favoured target of

individual and institutional investors.

Case Studies

3-star Turone Hotel

CAP117, a subsidiary of Orleans’ Deret Group,

acquired the 120-bedroom, 3-star Turone Hotel in

the centre of Tours, in a transaction conducted

by Christie + Co. The hotel adds to CAP117’s

hotels operated under the Accor flag.

2-star Alizé Hotel

Christie + Co’s Marseille office sold the leasehold

in one of the best located hotels in Marseille city

centre, the 39-bedroom Alizé Marseille Vieux

Port Hotel. The hotel was acquired by ValueState

Hotels, an investment and hotel management

company associated with the Proximity Investment

Funds, OTC Commerce et Foncier.

3-star Best Western France Hotel

Christie + Co’s Lyon office sold the freehold

of the Best Western France Hotel in Bourg-en-

Bresse for an undisclosed sum. This 3-star hotel

offers 44 rooms and is situated in the heart of

the city centre. The France Hotel received the

European Ecolabel in July 2011, one of only 27 in

France to do so.

3-star Relais d’Aumale Hotel

Christie + Co’s Paris office sold the freehold of the

Relais d’Aumale Hotel, the ancient hunting lodge of

the late Duke d’Aumale — the last private owner

of Chantilly Castle. This 3-star hotel/restaurant

comprises 24 rooms and suites and offers fine

dining experiences with its gastronomic restaurant

surrounded by a magnificent garden.

Hôtel Alizé

Relais d’Aumale Hotel

Philippe Souterbicq

Managing Director, France


International Business Outlook 2012


Signs of uncertainty

In Germany, following the positive

developments of 2010, the first six months of

2011 started promisingly from a demand and

transactional perspective. The productivity of

the key German hotel markets increased by

approximately eight per cent in the first half

to reach a transaction volume of ¤500 million;

a year-on-year increase of approximately 30

per cent.

Christie + Co’s contribution to this positive

development included the disposals of the

Mövenpick Hotel at Stuttgart Airport and

an internationally-branded hotel in Munich.

Another sign of a bullish market is that larger

portfolios were brought to the market, as they

were during the peak years from 2005 until

2007. The portfolio of QMH Germany, which

Christie + Co was appointed to sell, serves as

a good example. All these trends suggested

promising results as 2011 progressed.

In the third quarter of 2011, however, when

negative news coverage suggested an

upcoming debt crisis and the media reported

the credit ratings of the US and several

European countries being downgraded,

the market participants’ high spirits were

dampened. Subsequently, transactional

activity started to slow down, driven by the

banks’ reluctance to finance in order to fuel

the market. As a consequence, it was forecast

that the 2010 transaction volume of ¤900

million would not be reached again.

Predictions are quite challenging as no-one

can tell if we are already in the middle of

a financial crisis or still at its doorstep.

Whatever the case, there are signs that a


depression as dire as 2008 and 2009 is not

to be expected, for macro-economic indicators

still imply a positive development for Germany

in 2012. Meanwhile, European politicians are

doing what they can to provide sufficient tools

to calm the financial markets.

Nevertheless, it is more than likely that

lenders will focus on core transactions in

2012. Hence, hotel deals involving a higher

risk, such as developments, will become

more difficult to complete as loan-to-value

ratios will decrease and higher risk premiums

on loans will reduce returns. Due to the

more challenging financing environment,

opportunistic investors will be forced to

adjust their business model. As a result, we

anticipate that cash-rich buyers, such as high

net worth individuals and property funds, will

again dominate the market.

There are still some larger transactions in

the pipeline, initiated in 2011 and likely to be

completed in 2012, even though the parties

involved will be required to provide creative

solutions for those deals to be completed.

In addition, supply with a distressed

background might enter the market if hotel

demand collapses in the event of an overall

economic downturn, limiting the debt

servicing potential. Eventually, banks will

be forced to exit from distressed exposure

to clear their books in view of the Basel III

regulatory standards.

Case Studies

Lease of the Mercure Hotel

Bielefeld City, North Rhine-


On the exclusive instruction of the owner, the

closed-end property fund DS-Fonds Nr. 17

Mercure Hotel Bielefeld Herbert Sacksteder

KG, Christie + Co procured a new operator,

Kiel-based Nordic Hotels, for the Mercure

Hotel Bielefeld City. After a soft refurbishment,

Nordic Hotels will run the 3-star superior hotel,

as a franchisee of Accor under the Mercure

brand, on the basis of a 15-year lease contract.

The 123-bedroom hotel also comprises three

conference rooms, a restaurant as well as a bar

and is located in Bielefeld’s city centre, close to

the historic old town.

Sale of the Mövenpick Hotel


On behalf of the owner, Union Investment Real

Estate, Christie + Co sold the Mövenpick Hotel

Stuttgart-Messe to a group of investors based

in the Middle East. The recently-renovated

229-bedroom hotel, located close to Stuttgart

Airport, is operated on a management contract

by a subsidiary of Grand City Hotels.

Mercure Hotel Bielefeld City

Sale of the Best Western

Macrander Hotel in Offenbach,

close to Frankfurt am Main

Christie + Co provided advice to a foreign

investor in the course of their acquisition of the

Best Western Macrander Hotel in Offenbach

am Main. The hotel, until then owned by a fund

managed by WestFonds, offers 127 bedrooms and

seven conference rooms and provides excellent

transport connections. It is operated on the basis

of a lease contract by Macrander Hotels.

Sale of the Ibis Hotel Aachen

Marschiertor, North Rhine-


On behalf of the owner, DS-Fonds Nr. 19 Hotel

Ibis Aachen Herbert Sacksteder KG, a subsidiary

of Dr. Peters Fondsverwaltung GmbH & Co. KG,

Christie + Co sold the 110-bedroom Ibis Hotel

Aachen Marschiertor to an opportunistic fund.

The buyers operate the business via one of their

subsidiaries as a franchisee of Accor Hotellerie

Deutschland GmbH under the Ibis brand.

Markus Beike

Managing Director, Germany


International Business Outlook 2012

Middle East

and North Africa

Dubai Office

Christie + Co broadened its network and

international focus with the opening of its Dubai

office in March 2011. Building on its existing

relationships in the Middle East and North Africa

(MENA) and combining these with a wealth of

knowledge and experience from a team positioned

in the region, the initial focus for the Dubai office

is to provide consultancy services to companies

based in, or wishing to enter, the MENA countries.

After a successful launch event at the prestigious

Burj Khalifa, the first challenges of operating

in the market were presented in the form of

significant political upheaval in Egypt, Libya and

Tunisia, and civil unrest in Bahrain and Syria —

the so-called ‘Arab Spring’.

Whilst these events understandably impacted

hotel performance and halted investment

decisions in those locations in the immediate term,

they underlined the strength and stability of other

countries in the region, notably the United Arab

Emirates, where rebounding hotel performance

in the second half of the year was a welcome

surprise to hotel operators.

GCC focus during 2011

Our focus during 2011, particularly after the

events of the Arab Spring, was maintained

on the opportunities within the markets

of the Gulf Co-operation Council: Bahrain,

Kuwait, Oman, Qatar, Saudi Arabia and the

United Arab Emirates.

Qatar has the highest per capita GDP and the

fastest growing economy in the region.

It is currently the focus of new activity as the

authorities plan how to meet the requirements

for hosting the 2022 World Cup. From significant


infrastructure down to the last hotel room,

there is a lot to do in the next ten years. With

10,000 hotel rooms currently and a further 6,700

in the pipeline, there is still a preoccupation

with upscale hotel development, but to meet

the needs of a changing visitor profile this will

quickly morph into the diversified product of a

more mature hotel market, and even more new

hotel announcements.

During 2011 Christie + Co had an insight into the

strategic development issues facing Qatar when

we advised on the development of waterfront

hotels in the up-and-coming Lusail district.

Oman continued to see many of its larger

tourism projects on hold during 2011, largely

due to financing issues. Although the country

has yet to complete any of the government

approved projects with Integrated Tourism

Complex (ITC) status, this period has allowed

a re-planning and re-prioritisation of targets

within the larger projects. This could better

align launch dates with the completion of

the new terminal at Muscat International

Airport, growth of Oman Air and improved

direct air access for the tourism market.

Hotel development activity is progressing in

Salalah, where the international airport is also

undergoing expansion. During 2011 Christie +

Co provided development advice for a resort

on an isolated beachfront site outside Muscat.

The United Arab Emirates is dominated by the

existing and future hotel supply in the key

commercial centres of Dubai and Abu Dhabi.

Whilst economic growth has been restrained in

2011 it is still one of the largest economies in the

region, behind Saudi Arabia and Iran.

Concern with the future hotel supply-demand

relationship has shifted from Dubai to Abu

Dhabi during the year with hotels cautious about

their operating environment and hesitant to

make long-term projections. Whilst Dubai took

immediate advantage of the fallout of the leisure

and MICE (meetings, incentives, conferences,

exhibitions) markets generated by the Arab

Spring, much of Abu Dhabi’s hotel supply and

related infrastructure is still under development.

There has been a rethink on some of the

larger island projects, with initial plans being

redrawn and much longer completion dates

being agreed. In 2011 Christie + Co advised on

strategic redevelopment options for Hilton hotels

in Abu Dhabi and Al Ain, the development of a

lifestyle hotel in Dubai, and the renegotiation of

the contract terms for what would become the

Radisson Royal Hotel in Dubai.

Outlook for 2012

Into 2012, we expect hotel development activity

to be focused on Qatar and the completion of

hotel projects under development in the United

Arab Emirates. Older properties across the Gulf

countries will see a number of closures and

major renovations to keep pace with the quality

of new supply.

Saudi Arabia will be a growth market, not only

in its unique religious tourism market of Mecca,

where hotel performance continues to be strong

despite significant additions to supply, but in

secondary cities and around commercial hubs.

Oman will see major tourism projects move

forward during the year, evidenced by a revival

of activity towards the end of 2011.

Jordan, Lebanon and Syria show potential for

the longer term, but volatility in the region will

hamper any serious investors from committing

at present, and much of Northern Africa will be

subject to the same experience. Much longer

term there is significant potential to develop new

hotels in Libya and Syria.

Overall, in an area that has always seen volatility

and recovered from it, there are pockets of

opportunity and growth potential – although

some countries will face an uphill political

and economic journey during 2012 before the

recovery of the hotel industry can progress.

Christie + Co looks forward to conducting

projects across the MENA region throughout

2012 and extending to the full geographic reach

of the area.

Case Studies

Abu Dhabi National Hotels

Christie + Co provided advice to Abu Dhabi

National Hotels company, recommending

long- and short-term redevelopment options

for the existing 327-room Hilton hotel in

Abu Dhabi and the 202-room Hilton hotel in

Al Ain. An evaluation of alternative options

was undertaken in the context of the current

operating performance of the properties and in a

significantly changed future hotel environment.


Christie + Co assisted ACICO with the negotiation

of the management contracts for the newly

rebranded 471-room Radisson Royal hotel in Dubai

and the 257-room Radisson Blu Resort in Fujairah.

Both hotels had previously been operational

under the JAL Hotels and Resorts brand.

Hilton Abu Dhabi

Radisson Royal Hotel, Dubai

Gavin Samson

Director, MENA


International Business Outlook 2012

The Nordic Region, Russia

and the Baltic States

Financial distress caused by the situation in

the European Monetary Union (EMU) area has

also been felt in the Scandinavian and Nordic

region. The uncertainty in the economic

markets has left both developers and lenders

very cautious, increasing lead times.

Similarly, the transaction market has been

very subdued and no major deals have

been reported. Pandox is still absorbing the

acquisition of Norgani AS’s portfolio of 73

hotels from the previous year.

In terms of hotel market performance, most of

the markets have shown recovery in volume

terms, but the recovery in average room rates

is still lagging behind.


Finland is expected to produce one of the

strongest GDP growth levels in Western

Europe in 2012. This, together with the

continuing absence of international hotel

management companies and brands, continues

to provide an interesting opportunity for both

operators and investors. The market is still

concentrated on the mid-market segments,

with no new domestic brands emerging.

The recovery of Helsinki’s hotel market from

the 2009-2010 slump has been, to a large

extent, volume driven and fuelled by strong

increases in leisure demand. We expect the

market to continue its recovery in 2012 and

average room rates to increase moderately

in the short term.



Sweden appears to have weathered the

economic downturn reasonably well and

experienced one of the strongest economic

improvements in Europe in 2011. Not being

part of the EMU appears to have further

enhanced the country’s economic position.

Stockholm has for a long period been the

leading Scandinavian and Nordic hotel

market, and once again has produced strong

trading results in 2011. However, together

with weaker economic growth expectations

for 2012 and a relatively large amount of new

supply still to be absorbed, the near-term

growth expectations on volume and rates are

reasonably modest for 2012.


Denmark’s economy has suffered from low

domestic demand and growth was mainly

driven by exports in 2011 – thus the country

is expected to achieve only moderate gross

domestic product growth in 2012. Copenhagen

has for a long period been the conference

capital of Northern Europe. The city again

attracted a large number of conferences in

2011 and is expected to continue being a

popular destination for the next couple of

years, bringing in increasing numbers of

congress and conference delegates. However,

the city has experienced a strong increase

in new hotel supply over the past couple of

years, leaving the expected occupancy growth

at a moderate level. As a result of the new

supply, rates have been under pressure, and

only slight increases are expected in 2012.

Baltic Region

The economies of the Baltic States have so

far been reasonably resilient in the face of

deceleration in Western Europe. However, the

region is on the brink of a clear export-led

slowdown, and thus the economic growth rate

expectations for 2012 are lower than the growth

experienced in 2010-11.

Tallinn’s hotel market is heavily dependent on

Finnish travellers. As Finland has started to

show signs of financial recovery, with further

recovery expected to take place in 2012,

the market-wide demand volume increase

for hotels in Tallinn is expected to continue.

However, most of the demand in the market is

leisure-driven with lower yielding room rates.

Estonia joined the Eurozone in 2011 and is

still going through rate conversion in the

markets, which together with the market mix

realities translate to low room rate growth

expectations in 2012. It appears that both

Vilnius and Riga are experiencing relatively

strong recovery in terms of volume, but this

is against very serious market-wide drops in

2009-2010. These markets were also subject

to serious room rate discounts during the

slump in hoteliers’ desperate attempts to

attract customers. Overall, it seems that rate

recovery will be more difficult than expected

in both markets. Vilnius and Riga are both

expected to continue recovering in terms of

volume, but rate recovery expectations for

2012 are moderate at best.


The hotel market in Russia continues to be

active. St Petersburg is reaching saturation

point in the upscale segment due to recent

and anticipated openings, but will continue

to provide attractive options for further

international brands operating limited

service and mid-market hotels. International

hotel operators are expected to continue

penetrating the country further east to areas

such as the Krasnador region and the main

metropolises throughout the country.

Proposed hotel Lappeenranta

Case Studies

Proposed Arctic Resort, Salekhard,

Russian Federation

Christie + Co was commissioned by the local

authorities to conduct a feasibility study on a

proposed Arctic Resort Hotel & Spa planned in

Salekhard, Yamalo-Nenets Autonomous Region

(in western Siberia) in the Russian Federation.

The assignment involved advising the authorities

on the scope and quality of facilities required to

optimise the financial feasibility of the project

while enhancing the wider tourism development

plan for the region.

Kimmo Virtanen

Director, the Nordic Region,

Russia and the Baltic States

Proposed Hotel & Water Park

Sønderborg, Denmark

Sønderborg Harbour Company is co-ordinating

the development of the harbourside master

plan development in Southern Denmark. The

master plan was designed by the prize-winning

architect Frank Gehry. Christie + Co was

brought in to update a feasibility study for the

proposed full-service hotel and the adjacent

large water park development. After completing

the feasibility study, we successfully approached

a number of hotel-operating companies and

have now provided the client with a shortlist of

interested management partners for the project.

The operator search for the water park is still

ongoing and we anticipate providing a shortlist

of potential operators to the client.

Proposed Hotel Lappeenranta,


Lappeenranta draws the maximum benefit from

its proximity to the Russian border and today the

city records the highest tax-free sales in Finland.

Our client controls a prime site providing views

over Lake Saimaa and has plans to develop a 200room

hotel with a spa. Christie + Co conducted

a feasibility study on the project and recently

pursued a search for an operating company for

the proposed hotel.


International Business Outlook 2012


The Spanish hotel industry began showing

signs of recovery in 2010. This continued in

2011, demonstrating that the hotel sector is a

resilient one. Despite these signs, the economic

environment is affecting transactional activity,

given the scarcity of available finance and the

uncertainty of the markets.

In 2011, transactional activity in Spain continued

to be minimal, with two of the biggest deals

being completed by Christie + Co. The two

landmark Spanish hotels were successfully sold

by Christie + Co early in 2011 for a combined

sum in the region of ¤65 million.

We were expecting 2011 to be the year when

many distressed assets would be brought

to the market by banks and receivers, but

that did not happen as the Spanish banks

continued to refinance businesses. Next year,

that trend may change as the banks begin to

move assets from their balance sheets, giving

confidence to the markets.

Most buyers are looking for centrally-located

hotels in Barcelona and Madrid which are

perceived as secure places to invest, with

good trading results and excellent levels

of occupancy and ARR. In other areas, it

does not matter if the hotel is within a city,

mountain or coastal location; the interest is

generally in lease or management agreements.

Christie + Co introduced its performance

monitoring services to the Spanish market

in 2011. These services have generated much

interest from owners due to our reputation

within the hotel market, as well as our market

knowledge. Our performance monitoring

reports provide our clients with a wide

perspective on hotels’ positioning within local

markets and identify primary competitors.


With the change to the Spanish government

in December 2011, we anticipate that 2012 will

bring more opportunities to those investors

with equity looking for attractive deals in Spain,

especially as the banks adapt to the economic

environment. We foresee that the decline in

asset values will be accepted by banks as the

only solution to manage their portfolios.

Case Studies

El Rompido Golf

Christie + Co sold the hotel El Rompido Golf

on behalf of the Spanish hotel chain Set Hotels

to the Berlin-based operator Precise Hotel

Collection. The hotel is a stunning 5-star,

184-bedroom property with 12 suites, which is

based in one of the most outstanding resorts in

Costa de la Luz on the West Coast of Huelva.

El Rompido Golf Hotel

Inmaculada Ranera

Managing Director, Spain

and Portugal

Performance Monitoring of the

Hilton Diagonal Mar (Barcelona)

Christie + Co Spain was appointed by Iberdrola

Inmobiliaria to carry out the performance

monitoring of their hotel Hilton Diagonal Mar

(4-star, 433 rooms), located in the 22@ district of

Barcelona, one of the most active areas in the city

in terms of new business and leisure activities.

Iberdrola Inmobiliaria appreciates our reputation

as hotel advisers and considers our performance

monitoring service a valuable tool providing

detailed insight into how an asset is trading in the

local market.

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