Recent sales of business real estate show the French hotel sector is flourishing.
This is in contrast to other hotel markets in Europe. It’s another positive sign of the strength of the property market in Paris.
We take a look at the latest reports.
The first quarter of 2023
Six months into 2023, we can now examine the first financial quarter of the year, and the combined sales of hotel properties in Europe.
And while transactions in this part of the world fell overall, the French market in particular bucked the trend.
Looking at Europe as a whole, total sales of hotels reached €3.1 billion this quarter. Compared to the same quarter in 2022, that’s a drop of -18.6%.
But France – and also Spain – are moving in the opposite direction.
Overall, hotels accounted for 7% of investments by consumer real estate funds in the first few months of 2023.
There are suggestions that the hotel property market in France could grow even further in the coming months.
Why is the French hotel sector flourishing?
Looking at French real estate sales in the hotel industry, there is an incredible jump year on year.
Compared to the first quarter of 2023, sales are up 136.2%.
This is due to some very large transactions taking place in Paris earlier in the year.
One is the sale of the 428-room Westin Paris Vendôme. Dubai Holding purchased the remaining stake in the hotel from private-equity firm Henderson Park. The exact terms of the deal are not disclosed, but we do know it values the iconic property at €650 million.
Another large sale this year is the Hotel California – located in the 8th arrondissement (district) close to the Champs-Élysées. New owners Tikehau Capital reportedly paid over €100 million.
Elsewhere in France, the first quarter of 2023 saw hotel transactions of €598 million. That’s up 39% year on year.
Future predictions for the hotel industry
The reports indicate it’s the British and German hotel markets that are showing a decline, in both guest numbers and hotel property transactions.
Meanwhile, Paris is continuing to enjoy a strong recovery post-Covid. It’s a topic we wrote about in an earlier blog.
With our ear to the ground, we also know that many more hotels are coming to market soon.
The next big sale is set to be the Mandarin Oriental, another icon of Paris in the 1st arrondissement. This contemporary Palace hotel has 138 rooms and a trio of restaurants by two Michelin-starred chef Thierry Marx.
There are also reports suggesting both the Ritz and Le Meurice may come to market in 2023. If true, their sale could bring in somewhere around the €2 billion mark.
A major new hotel development in Paris
With the French hotel sector flourishing and the market for hotel transactions remaining buoyant, the industry is continuing to expand in other ways.
One example is the opening of the SO/Paris hotel, set a quiet stretch of the 4th arrondissement.
Calling itself, “a five-star hotel, but not a Palace hotel” it’s fast become popular with the fashion set, being completely full during the latest Paris Fashion Week.
Even before the hotel opened, one of the rooms featured in season three of Emily in Paris, something of a genius marketing move. It’s room 1201 if you’re interested in booking!
It joins a selection of recent hotel openings, offering visitors more and more ways to enjoy a vacation in Paris.
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