More beds: real estate investors are targeting hospitality

In recent years, the real estate world has become fully aware of the investment potential that hospitality offers. Unlike offices or retail, this sector has unique characteristics, but also challenges that require a thorough understanding.

Today, the “beds” are at the heart of the priorities of the global community of real estate investors. This trend reflects a reallocation of capital toward hospitality, driven by several dynamics:

• growing and diversified demand, linked to business travel, leisure tourism, and long stays,
• housing markets that are often underserved, prompting real estate funds to explore adjacent segments (student residences, senior living, coliving),
• the appeal of the hotel sector as protection against inflation, thanks to revenues indexed to real demand.

Investment leaders emphasize that hospitality is now establishing itself as a strategic asset in a diversified real estate portfolio. It combines yield, flexibility, and resilience, provided there is solid operational management and a clear strategy.

Spotlight on Madagascar

In Madagascar, the need for beds remains particularly strong across several segments:

• Antananarivo : increased demand for serviced apartments and long-stay solutions for expatriates, consultants, and business travelers.
• Major tourist destinations (Nosy Be, Sainte-Marie, Diego, Tulear) : a chronic shortage of quality beds to meet international expectations, particularly in the mid- and upper-market segments.
• A growing domestic market : a new generation of Malagasy travelers, particularly millennials, is looking for modern, affordable, and connected accommodations.

This structural undercapacity opens up fertile ground for investors, whether local or foreign, with opportunities to create or reposition existing assets.

Toward smart and sustainable real estate

Beyond hospitality, we are also witnessing the convergence between real estate and infrastructure, giving rise to a new asset class known as RE-infra. With increasingly connected cities, where mobility, energy, and technology are reshaping usage, investors are looking for smart and sustainable assets, capable of offering adaptability, resilience, and attractive profitability.

At RADAMA SA. , we support our clients in capturing these opportunities, by structuring strategic hotel and real estate projects that meet the needs of the Malagasy market while attracting institutional and private investors for the long term.