1. Sweden: Hotel Chain Targets Budget-Minded Travelers
Sweden’s Scandic Hotels Group is looking to diversify its growing portfolio, with plans to debut an economy-oriented brand called Scandic Go in early September in Stockholm.
Scandinavia’s largest hotel firm by location count, Scandic recently turned 60 and now operates 269 hospitality properties with nearly 56,000 rooms. The Stockholm-based company has five more hotels in its development pipeline, including a second Scandic Go set to open next summer, as it aims to “take a leading position” in the economy category, said CEO Jens Mathiesen.
2. UK: Amazon Closes Three Grocery Stores in Brick-and-Mortar Pullback
Amazon closed three of its tech-enabled “just walk out” grocery stores in the United Kingdom, including its first branch to debut outside the United States, as analysts question the e-commerce giant’s commitment to the concept and its thorny bricks-and-mortar strategy.
The Seattle-based company said it was closing three Amazon Fresh stores in west London that use scanning technologies allowing customers to bill purchases directly to their Amazon accounts. Amazon’s decision to scale back from 20 to 17 UK stores, with no new stores announced, fits a wider trend of scaling back its physical footprint amid ongoing difficulties in establishing a brick-and-mortar presence in some regions.
3. Germany: Largest First-Half Deals Reflect Drop in Commercial Transactions
Germany’s 20 biggest commercial property deals of the first half had a combined value that was less than one-third of the tally for the same time in 2022, reflecting economic challenges being seen in most property categories.
The first half’s 20 highest-price transactions totaled €3.5 billion, compared with €11.7 billion a year earlier, according to a compilation by Thomas Daily. This represents a landslide change, but also shows that large deals still take place despite high interest rates and other problems facing commercial real estate. Three stake transfers from Austrian investor Signa to co-investors for an estimated €1.5 billion accounted for almost half of the sales total in the first half of 2023.
4. France: Paris Firm Recalibrates Office Investment Strategy
Icade CEO Nicolas Joly is rethinking the positioning of the investment firm’s commercial real estate portfolio, with an eye toward addressing users’ changing priorities particularly in the office category.
Paris-based Icade’s first half of 2023 saw a strengthening of its balance sheet after it completed the first stage of a planned selloff of its healthcare division, with other changes in the works to make its office holdings more accessible and flexible for tenants and customers. “This is where the cohabitation of our two complementary businesses of investor and developer comes into its own, to support the transformation of our assets and, more broadly, that of tomorrow’s city,” Joly said.
5. Canada: Nation’s Largest REIT Eyes Industrial Expansion
Toronto-based Choice Properties REIT is pushing ahead with a development plan focused on industrial property as Canada’s largest real estate investment trust deals with an overall dearth of sales transactions around the country.
CEO Rael Diamond said a trend of fewer deals in retail and other categories continued in the second quarter, driven by uncertainty in financing. “We are taking advantage of strong fundamentals in assets we consider non-core and improving the quality of our retail portfolio,” Diamond told analysts during a quarterly earnings call. The focus on more industrial investments comes after moves by Choice Properties to sell off large portions of its office portfolio.
6. US: Blackstone Sells Self-Storage Properties for $2.2 Billion
Blackstone Real Estate Income Trust’s deal to sell Simply Self Storage to Public Storage for $2.2 billion signals more than the seller collecting $1 billion over what it paid less than three years ago.
It also indicates that optimism about long-term self-storage demand in certain parts of the country didn’t ease with the pandemic, analysts said. The sale by the unit of private equity giant Blackstone Group comes in the wake of a strong uptick in demand for self-storage properties during COVID-19 as people moved or downsized and needed a place to store their belongings.
This report was compiled from CoStar’s news publications in the United States, United Kingdom, Canada, France and Germany.