The UK led the way for hotel investment in Europe last year with £7.1b of acquisitions, an increase of 134% year-on-year, according to CBRE Hotels.
It was followed by Germany and France, each with £3.4b and £1.5b worth of investment respectively.
The European hotel market had a record total investment of £17.5b, an increase of 79% year-on-year. This exceeded the projected figure for hotel investment for 2015 by £2.1b.
The fourth quarter saw 31% of capital allocated to hotels, an increase of 101% compared with Q4 2014, while the hotel share of European real estate investment has increased by 6% since the last market peak in 2007.
Dominic Murray, head of EMEA brokerage, CBRE Hotels (pictured), said: "A heightened allocation of capital into the sector has led to strong pricing and yield contraction against a backdrop of operating performance recovery. Hotel operators are finding the opportunity to drive average room rates owing to robust levels of occupancy and continued growth in demand."
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