Hotel transactions in the UK fell significantly during the second half of the year, with single-asset sales and London dominating the market, according to business advisory firm Deloitte.
The sale of hotel properties totalled only £300m from July to December 2012, compared with around £1b worth of sales during the first half of the year. The second half of 2011 saw around £2.5b of hotel transactions.
"Consistent with the first half of 2012, single-asset transactions dominate and London remains the focus for most investors. The lack of readily accessible debt financing remains an ongoing constraint across the UK and has made it difficult to close on large portfolio deals in particular."
One of the most notable recent transactions was the acquisition of the Cavendish Hotel by the Ascott Group for £159m. Outside the capital, distressed sales - including the sale of the Glasgow Radisson to Azure Properties; Hyatt Hotels Corporation's acquisition of the Hyatt Regency in Birmingham and KSL Partners' acquisition of the Belfry - dominated the market.
Looking ahead towards 2013, van Marken said: "There are a number of portfolio and single-asset transactions that are currently being marketed. As a result, activity is expected to pick up.
"That said, difficulties in accessing debt funding and the continued disparity between buyer and seller in terms of price expectation mean disposal processes are likely to continue to be longer and more difficult to complete. The market will continue to favour cash buyers or those not totally reliant on bank financing to close a deal."
Value of hotel transactions doubles in first half of 2012 >>Hotel transactions increase as trading improves >>By Janet Harmer
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