Investment into Scotland's hotel sector of around £118m during the first half of 2017 has nearly reached the 2016's total transaction volume (£119.7m), according to real estate advisor Savills.
Edinburgh continues to be the busiest y market, accounting for 75% (£88.9m) of year-to-date volumes. Key deals include the acquisition of the Marriott Courtyard Edinburgh for £23.2m by M&G Real Estate in April, along with the sale and leaseback of Safestay Edinburgh at a net initial yield of 2.46%.
Chinese group Creation Gem acquired the Isle of Eriska hotel, while Singapore's 7 Hospitality bought DoubleTree by Hilton Dundee off a guide price of £5.5m.
Singapore-based MGM Muthu Hotels also expanded into Scotland with the acquisition of the Newton hotel in Nairn off an asking price of £4m and Ian Cleaver's Highland Heritage five-strong portfolio off an asking price of £4.5m.
Savills says this reflects a wider national trend, which sees investment by international buyers in 2017 total £1.2b, up 13.7% on full year 2016 levels, and in comparison to the £822m transacted by domestic investors.
Meanwhile, a number of major hotel developments are currently underway in Glasgow, including Motel One, which with 374 rooms will be Scotland's largest hotel by room numbers, and the first Radisson Red in the UK. Both are due to launch in Q1 2018.
Steven Fyfe, associate in the hotels team at Savills Scotland, said: "There has always been a four-figure pipeline of new rooms in Edinburgh, but demand is such that the city can easily absorb new supply as owners and managers note an ever longer 'peak season' for business. In particular we expect the arrival of the W Hotel will trigger other high-end operators to do the same."
Martin Rogers, head of UK hotel transactions at Savills, added: "The UK hotel market has had a strong start to the year as the sector remains resilient to the headwinds of the last six months."
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