The sale of the Ritz hotel in London drove transactions to £1.15b in the capital in the first quarter of this year, with strong interest in sites despite the current coronavirus crisis.
According to figures from Savills, the transactions represent an 8.8% year-on-year decline, but were 85% above the long-term average. It said that assets such as the Ritz and Westbury hotel were currently attractive investments given the background of volatile markets.
The estate agent reported that investment levels in London were set to hit record levels, but transactional activities had slowed due to the lockdown to curb coronavirus spread.
Savills hotels team director Rob Stapleton said: "The sale of the Ritz highlights the continued appetite for trophy assets. As we have seen in the aftermath of other market shocks, we again expect to see a flight to quality with assets such as the Ritz and the Westbury hotel likely to be increasingly attractive to investors seeking capital preservation in ultra-prime locations in one of the world's most resilient markets."
Head of valuations Tim Stoyle added: "The situation for the hotel market in London remains fluid as the duration of Covid-19 is very much an unknown. The lack of debt in the market will likely slow trading activity, however for now there maintains strong levels of interest in development sites, even those without planning consent, as developers look to be taking a longer-term view on the recovery of the sector."