The UK was the most active hotel transaction market in the first half of 2013, with investment volumes adding to £2b.
According to figures from Jones Lang LaSalle the acquisition of the 447 room InterContinental London Park Lane, which was acquired for £301.5m, pushed the UK ahead of France in terms of investments.
Some £1.1b was invested in France, including the Mandarin Oriental Paris which sold for £248m. Germany was in third place with £487m worth of investment.
Middle Eastern capital investments almost tripled in the period, up from £637m in the first half of 2012 to £1.8b in 2013. Investors such as Westmont, Starwood Capital and Morgan Stanley were the second largest group of investors with a market share of 20% of invested capital, followed by domestic investors with a market share of 18%.
Jonathan Hubbard, chief executive Northern Europe for Jones Lang LaSalle's Hotels & Hospitality Group said: "The year has had an extremely good start with investment activity accelerating in a number of key markets. Given the improvement in financing conditions we can expect 2013 volumes to exceed our initial forecast of £7.3b."
Christoph Härle, chief executive Continental Europe for Jones Lang LaSalle's Hotels & Hospitality Group said that transaction activity has picked up considerably this year. "This is being fuelled by a strong pipeline of opportunities coming to the market and a closing of the spread between buyer and seller pricing expectations, not least driven by more readily available debt financing, both from traditional as well as new sources of debt," he added.