Deal activity in the hotel sector has fallen by more than a third for the first half of 2019, according to the latest findings from PwC.
The total volume for transactions reached £2.6bn in H1 2019, marking a 35% drop in comparison with the same period in 2018.
Despite this, there is still an expectation for continued investment from Europe and the Far East for the remainder of the year, given the relative low value of the pound.
Assuming completion of some reported current deals, PwC expected deal volume to reach around £5.1bn in 2019, a 28% decrease compared with 2018.
However, even if a Brexit deal is secured by the end of 2019, PwC forecasted a further period of time before stability is regained and investor confidence returns to the UK, with 2020 hotel transaction volumes forecast to continue to marginally fall to around £4.8bn.
Sam Ward, UK hotels leader at PwC, said: “What we have seen in the first half of the year has been a more cautious approach by investors which has been dictated by the uncertainties of Brexit becoming more acute, ongoing volatility in the market, and weakened business sentiment.
“Portfolio transactions are down more than a third in comparison to the same period last year and single asset transactions are down more than a quarter.
“Until there is further clarity on Brexit, we expect the cautious approach to investment to be reflected in the second half of the year. Even if a Brexit deal is secured by the end of the year, it will take some time before stability returns.”
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