UK hotel investment volumes for 2014 are on track to exceed £3.5b this year with sales already totalling £952m during the first quarter, according to estate agent Savills.
The company said that there is approximately £2b worth of hotel assets in the market currently, with many more coming up for sale in the next few months. There is expected to be an increase in single asset hotel sales as lenders continue to recover their loans and new owners look to consolidate their portfolios.
Michelle Webb, director of hotels at Savills, said: "We expect this to be another very active year, with the potential to beat last year's transaction volumes which totalled £3.9b, the highest since 2007.
"We expect a steady flow of assets being sold throughout the year as confidence in buyers' and sellers' pricing gathers momentum and operational trading continues to show signs of recovery."
Private equity buyers were reported by Savills to be the most active during the first quarter of the year, driven by Starwood Capital's acquisition of De Vere Venues and the Four Pillars portfolios for £231m and £90m respectively. Meanwhile at least ten different institutions have bought £189m worth of budget hotels, mostly leased to Accor, Travelodge or Premier Inn.
Earlier this year, Savills suggested that regional hotel transactions alone could reach more than £2b in 2014.