April 2024: the real estate, tourism and hospitality press review

Last update : 6 May 2024

HoliProject presents its April press review. We take a look at all the news that has hit the property, tourism and investment markets in recent weeks. We also take the opportunity to highlight a number of underlying trends, particularly in the hotel sector, where players are having to adapt to a sharp change in expectations. However, the main concern at the moment remains, as ever, the deep and lasting crisis currently rocking the commercial property sector. The central question: what will be the real impact of this crisis on banking institutions ?

Commercial property : French market slows in the first quarter
What should we remember about the first quarter for commercial property ? The start of the year saw a slowdown in investment on the French market. Over the period, the volume of investment reached just €1.4 billion, well below the ten-year average of €4.6 billion. According to Antoine Grignon, Head of Capital Markets at Knight Frank, this level is reminiscent of 2010. Should we be concerned ? “Overall volumes will struggle to take off without major transactions in the heart of the main Parisian thoroughfares”, says Grignon. (LSA Conso)
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Investment : a year of turbulence and adjustment for SCPIs
Last year in France, the SCPI market underwent a period of severe correction. The cause: a downturn in the overall property market, with a significant fall in asset prices. As a result, some managers were forced to adjust downwards the book value of the properties in their portfolios. At the same time, the French Association of Property Investment Companies (Aspim) has revealed that half of all SCPIs failed to find buyers for their units at the end of the year. However, with the arrival of new players and the prospect of lower interest rates, managers remain optimistic for 2024. (BFM TV)
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Real Estate: The Hidden Valuation of Tokyo’s Real Estate Assets
In Tokyo, a significant gap of 22 trillion yen remains between the book value of corporate real estate assets and their potential market value. The reasons for this include annual depreciation and market appreciation. This unusual situation inevitably attracts the growing interest of activist funds. Among them is the New York-based Elliott Management, which consistently pressures Japanese companies to sell these undervalued assets. The opportunities are numerous and exceptional. For example, Mitsubishi Corporation owns buildings that are estimated to be worth five times the value recorded in the company’s books. (Japan Times)
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Commercial Real Estate: Between Strict Regulation and Market Resilience
Tracy Hadden Loh and Ida Rademacher highlight a frequently overlooked aspect of commercial real estate: contrary to the perception of empty offices, certain subcategories, such as neighborhood retail spaces, show remarkable resilience in the United States. This dynamism opens up often overlooked investment opportunities. However, regulators tend to restrict the lending flexibilities necessary to modernize or convert workspace areas. Nevertheless, it is evident that by diversifying their portfolios, investors can reduce their exposure to crises. (The Hill)
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Tourism: new market opportunities in the hotel sector
The hotel sector is reinventing itself to meet new consumer expectations. Patrick Mendes, Accor’s Managing Director for Europe and North Africa, highlights four major current trends. ‘Staying in your own resort is a thing of the past’, he explains. 36% of travellers want to connect with local communities when they visit a region. With this in mind, tourism professionals need to adapt their approach. This is all the more the case as, at the same time, hotels are being transformed into real places to live, with catering taking centre stage. All these changes are combined with the growing interest shown by travellers in the ecological impact of their stay. (Tom Travel).
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Real Estate: The Impact of New Environmental Standards in Europe
With the recent adoption of the Energy Performance of Buildings Directive by the European Union, real estate investors are facing significant expenses to bring their assets up to standard. This legislation, part of a broader effort to green the economy, will require major renovations to reduce the energy consumption of buildings. By 2033, a quarter of the most energy-intensive buildings must be renovated to meet these new standards, or their value could drastically decrease. These measures add to the challenges for a sector already weakened by high interest rates and a complex economic environment. (Fortune)
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Commercial Real Estate: The Impact of the Crisis on German Banks
Germany is facing a severe crisis in the commercial real estate sector. In this unstable context, banks are at the forefront, with an exposure of 1.4 trillion euros, according to figures from the European Banking Authority dated July 2023. The rise in interest rates has increased borrowing costs, forcing many real estate developers to delay or cancel projects, or even declare bankruptcy. Furthermore, the decline in office attendance, with occupancy plummeting since the start of the pandemic, highlights the severity of the situation. The uncertainty remains, and the repercussions could affect the economic stability of all of Europe. (Euronews)
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Office Real Estate: Ongoing and Intensifying Crisis in the United States
In the United States, major technology companies such as Google, Amazon, Meta, and Salesforce are reducing their real estate footprint, leading to a significant increase in vacancy rates in some urban areas. For instance, in recent months, Google has spent $1.8 billion on lease termination fees to withdraw from certain rental agreements. However, Marc Holliday from SL Green Realty Corp suggests that the rapidly expanding artificial intelligence sector could revitalize the real estate market. He notes that recently, some companies have doubled their presence in San Francisco. (Qwartz)
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Hotels : Accor affirms its ambitions for 2024
The Accor hotel group is pursuing its development with the opening of new establishments in Europe and the expansion of its top-of-the-range brands. These include Pullman, Mövenpick and Swissôtel. This growth is taking place both in the East, with the recent opening of the Swissotel in Tbilisi, and in the West, with various projects such as the Tribe in Milan. Accor is thus strengthening its presence with more than 350 new hotels planned in Europe and North Africa. It is now consolidating its leading position with nearly 3,000 establishments in more than 40 countries. (Business travel)
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Investment: property leasing in steep decline
2023 was a particularly difficult year for property leasing. This was particularly true in the office property sector. According to the Association of Financial Companies (ASF), the volume of such financing fell by 20.5% over the year, to €4.2 billion. This drastic fall, the biggest since the health crisis of 2020, reflects a significant drop in demand for workspaces, with a 44.3% fall in new contracts over the year. This downturn can be explained in part by the increased adoption of teleworking, which is prompting companies to reconsider their needs in terms of business premises. (Les Echos)
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Tourism : converting offices into accommodation for the Olympic Games
In the run-up to the Paris Olympic Games, and faced with a shortage of available accommodation, Checkmyguest is proposing an innovative initiative: converting vacant offices into luxury accommodation for tourists. This unique solution, which is intended as a credible and sustainable response to the problem of filling up office space, would make up for the lack of accommodation capacity. The accommodation created could be rented at rates ranging from €1,000 to €1,500 per night: a profitable alternative for the owners. This would also spare residential accommodation at a time when the housing crisis is intensifying and hitting Parisians hard. (News)
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Commercial property : is the food sector a safe bet ?
That is certainly the opinion of Abhishek Jha, Chairman of Greenman Arth. In his view, commercial property, dedicated to the food trade, remains one of the most stable asset classes. In fact, it has weathered the economic turbulence of 2023 perfectly, in both France and Germany, with a limited level of correction. It’s a long-term investment,’ he says. The food retail sector is very resilient. Abhishek Jha takes the opportunity to point out that this sector is characterised by particularly long leases, with tenants seeking to secure their strategic locations. He is therefore confident about the current year, and anticipates an increase in transactions in the food retail sector. ‘Banks want to lend more. Buyers are ready to buy. Sellers are ready to sell. (Pierre Papier)
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Commercial property: a cautious first quarter in 2024
The French commercial property market fell significantly in the first quarter of 2024, with investment dropping by 55% to €1.7 billion, according to ImmoStat. BNP Paribas RE, on the other hand, presents a slightly more optimistic view, reporting a fall of only 40%. The first finding is that offices remain particularly hard hit, with a 65% reduction in transactions. By contrast, the hotel and logistics sectors are showing encouraging signs of recovery. In short, the context remains one of caution. (Pierre Papier)
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Date de première publication : 6 May 2024

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