The firm cites renewed investor confidence in regional markets as a key driver behind the overall growth, with 71% of deals taking place outside the capital. However, the London hotels market remains strong, particularly in value terms, with Savills reporting that 60% of single asset transaction volumes were in the city last year.
International real estate advisor Savills has reported that total transaction volumes in the UK hotels market reached £6.1 billion in 2014, marking an increase of 55% on the previous year and the highest level since 2006.
The firm cites renewed investor confidence in regional markets as a key driver behind the overall growth, with 71% of deals taking place outside the capital. However, the London hotels market remains strong, particularly in value terms, with Savills reporting that 60% of single asset transaction volumes were in the city last year.
The firm also highlights an increased appetite for portfolios with deals involving multiple assets accounting for 53% of hotel investment in the UK in 2014, equating to £3.2 billion. Major portfolio transactions last year included LRG’s sale of 21 Holiday Inn hotels to Kew Green from a guide price of £70 million, in which Savills acted for the purchaser.
Martin Rogers, hotels director at Savills, comments: “Investor demand returned with gusto in 2014 and we expect it to remain strong in the year ahead. In London, the demand and supply imbalance will put downward pressure on yields while regional activity is likely to be fuelled by the break up of portfolios purchased in recent months.”
Photo caption: Holiday Inn London.
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