The real estate industry is currently experiencing the greatest upheaval in decades, which was also shown by the walk through the exhibition halls, where one sometimes rather had the impression of having strayed into an environmental trade fair. Especially in the special show "Expo Real Decarb - make the climate change work", which was presented there for the first time, where the discussion audience sat on cardboard boxes and the exhibitor tables were hidden behind wooden poles.
This year, the fair had dedicated its hotel conference, the Hospitality Industry Dialogue, to a single topic for the first time: sustainability. Thus, these topics attracted many listeners, although outside the conference forum, other, more explosive topics gained the upper hand.
Sustainable refurbishment, sustainable building and CO2 reduction, also in operations, dominated the discussion rounds on the days of the fair. "In terms of expansion, we are not quite where we want to be yet," explained Max C. Luscher, CEO Central & Northern Europe at B&B Hotels. "In all acquisitions, ESG is an increasingly important component. When it comes to financing, banks ask if there is a building certificate." Luscher is proud to have reduced the CO2 emissions in the operation of his hotels to two kilograms per overnight stay, measured according to Scope 1 to 2: "The market here is five kilos," he explained.
IHG also wants more Longstay. Leisure and above all ESG, as here in the Voco Zeal Exeter Science Park in the UK. IHG Hotels
And on the presentation of the Treugast ranking, Treugast Managing Director Moritz Dietl presented, among other things, the three best participants in the ranking in terms of CO2 emissions in Scope 1 to 3: Here, Motel One is in first place with 4.8 kilograms per occupied room, followed by a&o Hostels with 6.1 kilograms and Explorer Hotels with 9.6 kilograms. In the future, CO2 emissions will be an important benchmark for building owners and operators.
Conversions, conversions...
Nevertheless, on the first two days of the fair, one could not help feeling that many companies are simply postponing sustainability measures to the distant future in the current crisis. For hotel operators, other topics had priority, first and foremost the search for conversion possibilities. These are at the top of the agenda for all hotel chains, as Europe Developer Wilijemin Geels from IHG confirms: "We have adapted our way of thinking to reality and have become more flexible for all brands. In Dresden, for example, a Holiday Inn Express was built in the former student hotel. For this brand, we also developed an urban room, which is smaller at 16 square metres than the standard Holiday Inn Express room at 18 square metres."
In addition, adjustments will be made to Holiday Inn, Holiday Inn Express and Voco, each of which can be supplemented with suites for longer stays and will then be labelled "& Suites". In addition, IHG wants to expand more in the resort sector with Holiday Inn and Holiday Inn Express, a Holiday Inn and Voco Resort was opened in Szlarska Poreska in Poland, German locations in the mountains or by the sea are also conceivable. IHG also signed an Indigo and a Holiday Inn Express in Budapest at the fair.
Worse than expected
If such announcements were not part of a pipeline from the past, even in the crisis only the sun would shine. What looked like a party on the outside was in fact a crisis meeting. "Things have turned out worse than we imagined last year," said moderator Prof. Dr. Steffen Sebastian from the IREBS International Real Estate Business School at the University of Regensburg. The disenchantment with politics in Germany - the "strong man of Europe" - is great: too much regulation, no investment security, bad mood between the real estate industry and the federal government... "In the end, we'll have to sell the place after all," was the comment of several interlocutors in the corridors...
The transaction market has almost come to a standstill due to high interest rates, even higher construction costs and often a lack of equity capital. Maria-Teresa Dreo-Tempsch (Berlin Hyp AG) put the doomsday scenarios into perspective. The real estate sector had to realize that the super cycle was over and that the value corrections had to be accepted. But then one could also work and calculate again...
Hotel industry puts up a brave fight
The housing industry brings the barrel to boil over: A lack of living space and high bureaucratic hurdles were a central theme at Expo Real - and social explosives due to rising rents. In contrast, hotel real estate can count itself lucky to be judged positively in principle: Investors expect a dynamisation, as the performance figures are very good - even with a shift to leisure projects.
Increasingly, however, the focus is not only on an object - a property - but also on a neighbourhood. What does my property bring to the neighbourhood? Mixed use is on the rise: The office asset class is under a lot of pressure, but good, modern offices are still needed because not everyone wants to stay in a home office or even wants to. In this context, cradle-to-cradle is becoming increasingly important for hotels. Moreover, more and more investors as well as tenants are asking for certifications - as a kind of additional insurance for the real estate value.
Basically, Germans view their country more critically than international investors. In this respect, there is a shift in the asset classes: Hotels are becoming more interesting again because they are in high demand from guests, and RevPAR is rising. In contrast to vacant office towers, whose rent many companies can no longer pay overnight, hotels - in line with the continuing demand on the consumer side - provide relatively reliable forecasts for many months to come, with the additional "promise" that the next season will lift all KIPs again.
At the same time, international, capital-rich investors are lying in wait: they are waiting for "bargains" - outside the doors of Expo Real to get an idea of the situation on the ground. Interest rates, inflation and uncertainty indeed only allow one to lie in wait for sought-after properties, but not to strike.
The real estate industry as a whole is in the midst of a profound transformation. Meanwhile, everyone is waiting for some bottoming out in market values and plateauing in interest rates. How this will affect the development of real estate values is characterised by uncertainty. German political celebrities made themselves scarce at the fair. / map, sst, syk
