Hotel deal volumes in Scotland totalled around £149m across 24 key deals in 2022, according to the latest figures from Savills.
The total marks a 34% decrease on investment volumes in 2021, on the back of wider macroeconomic conditions, including rising debt costs.
Savills said the decline was in line with the decrease seen in overall investment volumes, which are down by 27.5% year-on-year.
Scottish hotel transaction volumes during 2022 amounted to roughly 5% of overall UK volumes (£3bn). Domestic UK buyers represented around 72% of volumes, with the remaining 28% comprising international buyers.
Key individual transactions in Scotland included the circa £30.2m sale of Premier Inn Glasgow, and Fairtree and Blantyre Capital’s acquisition of the Fonab Castle hotel in Pitlochry.
Portfolio deals included the Chardon Portfolio, in which Atlas Hotels bought the Chardon Group, with backing from L&R Hotels. The portfolio contained the Holiday Inn Glasgow Theatreland, Holiday Inn Express Glasgow, Holiday Inn Express Edinburgh Royal Mile, Holiday Inn Express Edinburgh Airport, Holiday Inn Express Dunfermline and Holiday Inn Express Perth.
Steven Fyfe, hotel capital markets director at Savills Scotland, predicted that volumes will recover by the end of 2023 to £200m.
Fyfe said: “While the second half of the year was challenging, in terms of transactional volumes, H2 was marginally stronger than H1 in Scotland, demonstrating the ability to complete transactions in a difficult market.
“We are seeing stability starting to return to the market as we begin the new year with a number of sale processes under way. In terms of investment volumes, we expect a strong start to the year, with year-end volumes anticipated to reach £200m.”
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