Why more investors are checking-in to Nordic hotels

The Nordic hotel investment market has typically been characterized by strong local currency and domestic or pan-Nordic capital deals, limiting competition and making it harder for overseas investors to gain access.

But that’s all starting to change.

While established domestic investors such as Pandox, Balder or NREP have historically dominated the market, for the first time, a broader range of European players from family offices to private equity funds and institutional core plus investors are checking-in to the Nordic hotel market.

High living standards, social equality, and political stability make the Nordics attractive for businesses and investors. But recently, weaker currencies have added another pull factor, says Stefan Giesemann, JLL’s Managing Director for Hotels & Hospitality Capital Markets, DACH, Central, Northern and Eastern Europe.

“Local currencies such as the Swedish krona have weakened in comparison to both the British pound and the euro, opening the market to more international capital,” he says.

Cross-border investors seeking to diversify portfolios and generate liquidity, particularly those from the UK and U.S., are also taking advantage of the positive impact of currency forwards when investing in Swedish or Danish hotels.

“By hedging foreign exchange risk and managing exposure they’re protecting themselves against future potential currency fluctuations,” adds Giesemann.