'Demand for hotel investment remains strong, but the limitedproduct available is frustrating investor activity at present,"said Christoph Härle, Senior Vice President at Jones Lang LaSalleHotels. 'German institutional investors are seeking city centrebusiness hotels subject to long-term lease agreements which arecurrently not being offered in abundance.'Major deals to completein 2001 included the Nassauer Hof in Wiesbaden, bought by Ebertz& Parnters for €35.3 million ($32 million) with an additional€6.1 million ($5.5 million) to be spent converting it to a luxuryhotel. Also in Weisbaden, the Aukamm Hotel was sold for a reported€19.4 million ($17.5 million), with the new owners, Astron Hotels,to spend €1.8 million ($1.6 million) to bring it up to their brandstandards.

Ebertz & Partners also bought the 252-room Holiday Inn Bonn,currently operated by Scandic. The US-based Lone Star Fund boughttwo Quality Hotels in Peine and Troisdorf, paying Friendly Hotelsof the UK €5.3 million ($4.8 million) for two assets with acombined room count of 178 rooms. Following this, the Lone Starfund bought the 144-room Queens Hotel Bremen from Queens MoatHouses. Another US investor active in the market was Westmont whichacquired the three-star, 123-room Rema-Hotel Savoy hotel located inDsseldorf.

The effects of the terrorist attack in the USA and thesubsequent political uncertainty have not had a significant impacton the German investment market to date. According to Härle,investors and operators in many Continental markets are feelingsomewhat more distanced from the current political conflict thosein the UK.

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