UK hotel investment hits £2bn

Investment into the UK hotel market in the first half of 2017 reached £2bn, according to Savills. The firm predicts that levels will reach £5.1bn for the full year, up by 28% on 2016’s volume of £4bn. The hotel investment market in H1 was driven by London and individual sales as overseas investors continued to demonstrate appetite for the sector. The capital remains the largest market, accounting for 55% of transactions by value, or £1bn. Individual sales accounted for 92% of transactions by value, or £1.8bn. However, a number of high-profile portfolios are expected to come to the market in the second half of the year. Overseas investors have been particularly desirous, accounting for £1.2bn in the first half of the year compared with £822m from by domestic investors. Key deals for the first half of the year include the sale of the South Place Hotel in London, the sale of the Holiday Inn in Manchester city centre and ongoing sales by Lone Star from its Project Solstice portfolio. Larger single-asset deals have driven the UK market in the first half of the year, boosting the average price per key from £119,317 to £147,077 over the past 12 months. Martin Rogers, head of UK hotel transactions at Savills, said: “The UK hotel market has had a strong start to the year as the sector remains resilient to the headwinds of the past six months. The favourable exchange rate has attracted overseas buyers looking for stable, long-term income. “The anticipation of a softer Brexit will provide further comfort, encouraging development and relieving pressure on staffing.” To send feedback, e-mail amber.rolt@egi.co.uk or tweet @AmberRoltEG or @estatesgazette