Prague will see new hotel conversions
Hotelsschedule 27 August 2018
Czech chain Pytloun Hotels will open on Wenceslas Square
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CZECH REPUBLIC Domestic operators are gaining in competitiveness, Czech chain Pytloun Hotels will open on Wenceslas Square. The Czech hospitality market has been achieving above-average performance rates thanks to a steadily growing number of tourists. This has had a positive effect on hospitality properties whose yields ranging between 6 proc. and 7 proc. are noticeably higher than the yields in other commercial sectors, specifically retail, office and industrial. They are also attractive with rents guaranteed for a long time. As a result, converting office space into hospitality facilities is becoming a frequent choice among both domestic and international investors. Czech operators can compete with foreign ones quite capably and tend to be the preferred choice for hotel owners. Just about 14 proc. of the local market operators are international brands, according to Cushman & Wakefield’s report.
Due to a lack of premium product, 2018 will witness more conversions and we can expect lower transaction volumes than in previous years. This is why investors seek suitable buildings to convert, especially existing office buildings in prime locations, expecting higher yields. Market saturation virtually eliminates new hotel development in lucrative locations. Cushman & Wakefield has noted a trend in Wenceslas Square and Prague 5 and Prague 7 where office space is being converted into hotels and
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