Hotel sector property prices up 17%

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Average property prices in the hotel sector increased 17% during 2014 as confidence returned to the industry and transactional activity accelerated.

According to data released today by specialist property adviser Christie + Co, trading performances gradually strengthened and funding increased throughout the year.

“A number of portfolio deals were transacted during the year and in the majority of cases we were able to drive prices and exceed initial expectations,” said Christie + Co’s managing director Chris Day.

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Investors coming out of North America into Europe were principally responsible for driving the activity.

During 2014 hotel owners and debt holders rushed to capitalise on the hunger for hotels, which are seen to offer attractive returns and opportunities to add value.

Sale prices were driven forward and the sale of 21 Holiday Inn hotels to Kew Green Holdings provided just one example.

Christies said that 2014 had even brought the busiest week that the company has ever had in the hotel sector when in one seven-day period it sold 42 hotels with a total value of more than £500 million.

Looking ahead to 2015, Day feels there is much to be optimistic about. He said: “There remains equity looking for more investment opportunities and plenty of buyers around who are willing and able to complete deals and so we can expect more opportunities to come to market. I think we can expect more single assets to come to market as hotel portfolios are rationalised.”

Day added that the condition of hotel assets should also continue to improve, as banks and stakeholders recognise the power of customer feedback and reviews and the necessity of capex.

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