CBRE’s Nordic Hotel Market snapshot: Strong investment outlook for 2025
CBRE’s latest market analysis suggests that transaction volumes in the hotel sector will gain momentum in 2025, with strong interest from investors. There is a clear preference for assets with high operational exposure, meaning investors are particularly drawn to opportunities where they can assume vacant possession. Even core investors are becoming more active, given that most Nordic hotel leases include revenue-linked upside potential. Luxury hotels continue to outperform mid-market properties, with notable growth in the high-end segment. Demand for independent properties with a distinct Nordic identity and personalized guest experiences remains strong, catering to affluent travelers seeking authenticity and exclusivity.
Performance across the Nordic countries has varied significantly, influenced by local economic and investment conditions. Norway has seen exceptionally strong operational hotel performance in most areas, with certain cities emerging as clear market leaders. However, persistently high interest rates and unique tax policies differentiate Norway’s investment landscape from its regional counterparts. Sweden has faced prolonged economic challenges due to a slowing industrial sector, social issues, and higher unemployment, though a series of interest rate cuts are expected to boost economic recovery, leading to increased hotel demand and investor confidence. Finland continues to struggle with geopolitical and economic challenges, including a weakened position as a key transit hub to Asia. While investors remain cautious, hotel operators express greater optimism regarding future performance. In Denmark, hotel operations remain solid, but investment activity has been subdued, particularly in Copenhagen, where investors are waiting for the market to absorb existing oversupply before committing to new deals.
The Nordic hotel investment market recorded EUR 648 million in transaction volume in 2024, marking a 27% increase year-over-year. Among the most notable transactions were NREP’s acquisition of Clarion Hotel Stockholm, one of the city’s largest hotel assets, and its purchase of Comfort Hotel Karl Johan in Oslo, further solidifying its regional presence. Other significant deals included Pandox’s acquisition of Radisson Blu Hotel Tromsø, a key asset in Norway’s growing hospitality market, and Balder’s purchase of Clarion Hotel Karlatornet in Gothenburg, reflecting continued investment in Sweden’s major cities. The return of institutional capital to the hotel segment was highlighted by Folksam’s acquisition of Villa Dahlia in Stockholm, a transaction in which CBRE acted as the vendor’s broker on behalf of Vernum Fastigheter.
As inflation stabilizes and central banks maintain favorable interest rate policies, CBRE expects investment activity to pick up in the latter half of 2025. Investors are likely to focus on value-add opportunities, with a preference for vacant possession properties and short lease terms, ideal for repositioning strategies. While core capital remains cautious, there is a steady flow of capital targeting the sector, signaling renewed confidence in the Nordic hospitality market. With an increasing number of investors seeking opportunities across the region, 2025 is set to be a pivotal year for hotel transactions, driven by strategic acquisitions and a recovering economic outlook.
Authors: Erik Myklebust & Jussi Niemistö (CBRE)
