CBRE has released its January 2025 edition of the CBRE Nordics Hotel Market Snapshot, the market-leading research report series focusing on the Nordic hotel market. In this article, CBRE’s Jussi Niemistö, Head of Research, Nordics, and Erik Myklebust, Head of Hotels, Nordics, summarize the year 2024 for hotel investment and performance and present their recent key findings from the newly released hotel report.
CBRE’s current pipeline and investor chatter both indicate that 2025 will see increased transaction activity within the hotel segment. Investors still get more excited when operational exposure is high, indicating a preference for vacant possession hotel opportunities. Since most hotel leases in the Nordic region also offer some topline-linked upside, even core-investors are increasingly active on our patch. The most luxurious hotels in the region currently outperform other more humdrum properties. As this report reveals, growth rates have been high in the luxury segment, and the prevalence of independent properties with Nordic charm and personalized touches plays well with the well-heeled travelers.
Regional and in-country differences in the Nordics
There are big differences in hotel operational performance between the Nordic countries and also within each country. In the following pages, we scratch the surface of what has happened over the past year, but the nuances remain many and multifaceted. In Norway, for instance, operational hotel performance remains stellar most places, with some real star cities. Unlike the other regional countries, however, interest rates remain stubbornly high and idiosyncratic taxation issues also contribute to a different local investment climate. Sweden’s more industrialized economy has faced headwinds for longer and grapples with some social issues as well as higher unemployment. Successive interest rate reductions will help accelerate growth more quickly and at a higher pace. Finland continues to face easterly headwinds of its own, and Helsinki has lost, temporarily at least, its competitive advantage as the airline hub with the shortest flight time to large Asian metropolises. Investors still factor in the full spectrum of risk, while hotel operators remain more optimistic. Danish hotel performance has been good, but very little has happened on the investment side recently as investors still wait for the oversupply around Copenhagen to be fully absorbed.
Investment market sentiment expected to improve in 2025
Nordic hotel investment reached €648 million in 2024, reflecting a robust 27% year-over-year increase. Among the most significant hotel transactions during the year was NREP's acquisition of one of Stockholm's largest hotels, the Clarion Hotel Stockholm. Additionally, NREP secured a prime hotel asset in Oslo—the Comfort Hotel Karl Johan. Other noteworthy transactions included Pandox’s purchase of the Radisson Blu Hotel Tromsø and Balder’s acquisition of Clarion Hotel Karlatornet in Gothenburg. It is positive to note the return of institutional capital to the hotel segment, highlighted by Folksam's acquisition of Villa Dahlia in Stockholm, where CBRE acted as the vendor’s broker on behalf of Vernum Fastigheter
The market sentiment remains cautiously optimistic entering 2025, with a steady number of investors looking to allocate capital into the European hotel markets. We anticipate an increase in investment activity throughout the year, particularly in the latter half, as inflation continues to stabilize, and central banks maintain favorable interest rates. A significant amount of capital is expected to be directed towards value-add strategies, while core capital remains somewhat more conservative. We foresee assets with vacant possession and short remaining lease terms to be highly sought after by investors pursuing repositioning strategies.
Read more? Download our report
Register to download the report:
Contact us for more information
Nordics
Erik Myklebust, Head of Hotels, Nordics
+47 995 75 275
erik.myklebust@cbre.com
Jussi Niemistö (M.Sc.Econ, CEFA), Head of Research, Nordics.
+35 8 40 537 5760
jussi.niemisto@cbre.com
Denmark
Erik Myklebust
erik.myklebust@cbre.com
Finland
Nadja McKenna
nadja.mckenna@cbre.com
Norway
Erik Myklebust
erik.myklebust@cbre.com
Christian Kahrs
christian.kahrs@cbre.com
Petter Rødseth
petter.rodseth@cbre.com
Sweden
Robin Stenlund
robin.stenlund@cbre.com
Marcus Carlsson
marcus.carlsson@cbre.com
