Scottish hotel investment up 38% in 2024

Scottish hotel transactions reached £431m in 2024, up by 38% on 2023 and significantly surpassing the 10-year average of £282m. Scotland accounted for approximately 7.5% of all UK hotel transactions last year, the highest share outside London, according to Savills. Edinburgh hotel deals made up £251m, representing 58% of the Scottish total. Notable transactions included Pandox acquiring the DoubleTree by Hilton for £49m and Millemont purchasing the Yotel, both from Starwood. In Glasgow, Swiss Life purchased the Maldron Hotel for £33m. The sale of several prominent hotels across Scotland drove single-asset transaction volumes to £286m, two-thirds of the Scottish total. The remaining third of transactions involved portfolio deals, such as Blackstone’s acquisition of the Village Hotel platform for around £850m, KKR and Baupost’s purchase of the 33-hotel Marriott portfolio with operating partner Amante for around £900m, and Ares’ acquisition of 21 Accor hotels from Landsec for around £400m.  In terms of buyer profile, domestic buyers accounted for 40% of hotel purchases in 2024, a notable drop from 77% in 2023, driven by substantial portfolio acquisitions by US investors. Consequently, international capital made up 60% of transactions, with buyers from the US, Sweden and the United Arab Emirates. This growth is linked to consistent revenue per available room in recent years. Scotland’s hotel sector is expected to have a robust year ahead, with several sales already in progress, including Nuveen Real Estate’s sale of the W Hotel in Edinburgh. Additionally, several hotel openings and up to 1,500 rooms are under development, such as Cheval Maison in Glasgow and both the Hoxton and Jenners Building in Edinburgh. Scotland is projected to remain one of the strongest-performing hotel markets outside London in 2025. Steven Fyfe, hotel capital markets director at Savills Scotland, said: “Once again, Scotland performed exceptionally well in 2024, and we continue to see year-on-year increases in transaction volumes, reflecting the strong growth in revenue per available room in key markets. “Private equity confidence has been central to this recovery, with significant investments made by Starwood Capital, Blackstone and KKR, among others. This is because the sector remains supported by solid fundamentals, serving as an inflationary hedge and offering continued international appeal.” He added: “In particular, Edinburgh remains a global tourist destination, which we have seen in the higher than average number of single-asset sales. It is also uniquely placed to cater for various products including serviced apartments and hostels, making the city especially appealing to investors looking to enter the market. With all this in mind, we expect transaction volumes will continue to outpace the 10-year average in 2025.” Photo © Vojtech Bruzek/Unsplash