Investment into UK hotels has risen by 28% to £3.2bn during the first half of 2018, according to new research.
A new report by Savills has found that the uplift was driven by portfolio deals, which accounted for 71% (£2.3bn) of transaction volumes. There were 79 deals in H1 2018, compared with 107 in the same period last year.
Key deals during the first half of the year included Brookfield’s acquisition of the SACO portfolio for £430m, and Vivion Capital Partners’ £750m purchase of the Project Ribbon portfolio.
Overseas buyers accounted for 51% (£1.6bn) of transactions during the period.
Israeli and Canadian investors were the most active, respectively tallying 24% and 14% of the investment total.
Domestic investors accounted for less investment in terms of value (£1.56bn). Despite this, they represented 71% of deals (56 transactions).
Hotels in London attracted £1.23bn of investment (38% of the H1 total) across 11 deals, with notable transactions including the sale of 5 Strand by Indian real estate developer ABIL Group for more than £90m and Crosstree’s acquisition of the RE Hotel in Shoreditch.
The South East was the second most popular region, accounting for 23% of volumes (£22m) followed by the north with 15% (£480m).
Savills predicts the total for investment in British hotels will reach around £5.4bn for the whole of 2018.
Martin Rogers, head of UK hotel transactions at Savills, said: “This year has got off to a strong start, driven by several high-profile portfolio transactions.
“The UK hotel market remains attractive to domestic and overseas investors, providing something for everyone due to the range on offer from single regional hotels to trophy assets in London.”
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