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UK hotel investment up 28% on H1 2017 to reach £3.2bn

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Investment into UK hotels reached £3.2bn in the first half of 2018, a 28% increase on H1 last year according to Savills.

The market was predominantly driven by portfolio deals which accounted for 71% of transaction volumes (£2.3bn). Deal count hit 79 in H1 2018 compared to 107 in the same period last year as volumes were driven by large portfolio deals.

Key deals included Brookfield’s acquisition of the SACO portfolio for £430m and the £750m acquisition of the Project Ribbon portfolio by Vivion Capital Partners.

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Overseas buyers continued their activity in the UK hotels market with Savills noting they accounted for 51% (£1.6bn) of transactions. Israeli and Canadian investors were the most active with 24% and 14% of the investment total respectively.

Despite domestic investors accounting for less investment in terms of value (£1.56bn), they accounted for 71% of deal count (56 deals).

Savills figures show that London hotels attracted £1.23bn of investment (38% of the H1 total) across 11 deals with key transactions including the sale of 5 Strand by Indian real estate developer ABIL Group for over £90m and Crosstree’s acquisition of the RE Hotel in Shoreditch.

The south east was the second most popular region, accounting for 23% of volumes (£22m) followed by the north with 15% (£480m) of the total.

Martin Rogers, head of UK hotel transactions at Savills, comments: “This year has got off to a strong start, driven by several high profile portfolio transactions. The UK hotel market remains attractive to both domestic and overseas investors, providing something for everyone due to the range on offer from single regional hotels to trophy assets in London. Looking ahead we expect the market to remain active and predict the total for 2018 investment to reach around £5.4bn.”

Tags : hotelsinvestmentsavillsUK
Zoe Monk

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