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Savills predicts UK hotel investment set to reach £8.5b in 2015

16 October 2015 by
Savills predicts UK hotel investment set to reach £8.5b in 2015

The figure marks a 39% increase on last year's post-recession peak of £6.1b. The firm said £5.7b worth of UK hotels have changed hands so far in 2015, with the H1 total 76.8% higher than the same period last year of £3.5b.

Regional transactions have dominated the UK hotels market so far this year, accounting for more than 78% of the total. US private equity houses have been behind 65% of hotel acquisitions in the regions - spending around £2.1b - with key deals including Lone Star's acquisition of the Jury's Inn portfolio for £676 million.

Marie Hickey, commercial research director at Savills, said: "Availability constraints in London have attracted new overseas buyers to the regions, including Asia Pacific investors who have acquired more than £1b worth of regional hotel assets so far this year. Frasers Hospitality's purchase of the Malmaison and Hotel du Vin portfolio at £363 million is a good example. While there were no country house hotel acquisitions by Asia Pacific investors in 2014, we have already seen five this year."

While US investors have remained the most acquisitive overseas buyers of regional hotels, this is down on the 90% share they held in 2014.

Rob Stapleton, hotels investment director at Savills, added: "The UK hotel investment market is on course for a record year as the appetite among overseas and domestic buyers in both London and the regions shows no sign of waning.

"With yields close to or at their pre-recession peak, further downward shifts will be constrained but we expect transactional activity to remain robust as the operational markets continue to show growth and portfolios acquired over the last four years are broken up."

Savills predicts UK hotel investment set to exceed £3.5b in 2014 >>
Savills predicts regional hotel transactions to top £2b in 2014 >>

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