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The hotel investment volume in Europe, Middle East and Africa (EMEA) fell to €2.9 billion in 2009, reflecting the lowest volume of transactions since the late 1990s and a drop of 63% compared to 2008.
While 2010 is expected to remain challenging, by the year-end investment volumes could increase by almost 40% on the 2009 volume and reach €4.1 billion, driven by improving economic conditions, gradually strengthening investor confidence and an increase in stock on the market.

As lending capacity reached record lows in 2009, single asset transactions became the prominent type of deal in the hotel market accounting for 72% of total volumes, and portfolio activity falling by almost 80% compared to 2008. This trend is not forecast to change in the near future. Portfolio activity will remain limited as deals continue to require a high level of equity.

The number of distressed hotel assets on the market is expected to slightly increase in 2010. Although many owners have faced refinancing challenges in 2009, distressed hotel sales have not been widespread. During 2010 investment activity will be driven by the banks and their willingness to lend.

However as it might be the general case in Central Europe, in Eastern Europe the trend to increase will start slowly due to the financing difficulties and investors tend to feel invest their money in more secure markets. However one would quickly notice that in terms of REVPAR and payback period and the figure of exit scenario, Russian Market has been the best performer in last three years and Moscow by taking the lead in the world in terms of REVPAR.

We believe as IFK Hotel Management team, due to the unsatisfying supply of international brand supply in Russian Federation, the market seems quite promising. With a right local partner on board and reliable hotel operator like Golden Tulip Hospitality Group it is highly probable that investors will enjoy high yields from their hotel investments in Russian Market which can still named as lowly penetrated market in terms of hospitality investments.

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