1. Mexico: Nation’s Hotels Gain Business in Luxury Category
Mexico’s luxury hotels are garnering increased revenue and room rates by responding to generational shifts in guest expectations along with changing financial requirements, according to experts at a hotel investment conference.
“The privilege and the marble is out,” said Carrie Wilder, an executive with Expedia Group, on a panel at HVS’ Mexico Hotel & Tourism Investment Conference in Mexico City. “What’s in is being sustainable and being inclusive. That’s a different type of property.”
2. UK: Hotel Group Buys London’s BT Office Tower
MCR Hotels, among the largest hotel owner-operators in the United States, has agreed to a £275 million deal to buy London’s iconic BT Tower from BT Group, with plans to repurpose the office property into a hotel.
MCR is working with architecture firm Heatherwick Studio to explore options to convert the tower, named for the company originally known as British Telecom that previously occupied the property. MCR said it will take BT a few years to vacate the 34-floor tower, spanning about 213,000 square feet, “due to the scale and complexity of the work to move technical equipment.”
3. France: Logistics Property Investors Face Scarce Supply
Investors looking to capitalize on demand within France for eco-sustainable industrial properties may need to work much harder than expected in coming years due to a limited supply of new logistics space.
France’s government agency in charge of climate resilience enacted several measures in 2021 with goals that included developing or converting buildings and underused land to obtain net-zero emissions of pollutants, in response to growing evidence of climate change. But logistics developers point to challenges including property availability and government limits on how much land can be redeveloped in a given time.
4. Germany: Developers Target Large Cities for New Offices
Investment firm Pimco Prime Real Estate, formerly known as Allianz Real Estate, and developer Edge are planning a project with about 39,000 square meters of office space near the Ostbahnhof area of Berlin, the first in a series of “smart office” developments focused on prime locations in major German cities.
Scheduled for completion in spring 2026, the Berlin construction project at Am Wriezener Karree 15 is bank-financed and supported by companies from the Allianz Group and pension fund Bayerische Versorgungskammer. Tenants have not been announced for the building, which is planned to be operated 100% fossil-fuel-free.
5. Canada: Shopping Center Owner Looks To Add Housing
A major Canadian shopping center owner wants to combine shopping with shelter as it aims to add residential developments to its malls.
Quebec City-based Cominar has been negotiating with municipalities for zoning permission to build homes around its shopping hubs, a company official told CoStar News. “The mid-to-long-term plan would be to densify these assets while keeping the existing retail properties,” said Enzo Cocquerel, Cominar’s senior corporate finance adviser, noting that all of Cominar’s retail properties have development potential.
6. US: Office Market May Still Have Room To Fall
Some commercial real estate professionals say uncertainty surrounding the national office market is unlikely to fade in 2024 as they try to determine when demand will bottom.
With a record-high vacancy rate and more unwanted space available for sublease, stakeholders indicate in interviews they are bracing for more pain this year as valuations fall. What’s more, emptied office buildings and smaller lease sizes may compound challenges for landlords, they say, especially those facing maturing mortgage loans.
This report was compiled from CoStar’s news publications in the United States, United Kingdom, Canada, France and Germany.