UK hotel investment volumes reach £3.22bn in Q3 2019

14-10-2019

This year has seen 97 deals take place according to Savills, a decrease of 49% from the 190 that took place in the same period in 2018

Investment into UK hotels has reached £3.22bn in the first three quarters of 2019, according to new research from Savills.

Despite volumes being down c.44% on the same period last year, the numbers are up 11.3% against the 10 year average of £2.89bn.

This year has seen 97 deals take place according to the firm, a decrease of 49% from the 190 that took place in the same period in 2018. Despite this lack of deal count, there’s been continued interest in the sector from both domestic and overseas investors which accounted for £1.35bn and £1.87bn respectively.

Overseas investment has accounted for £1.87bn of investment so far this year, exceeding the 10 year average of £1.4bn by 38%. While some international buyers have reduced activity levels this year, there is still significant interest and purchasing activity by buyers from Asia Pacific.

In terms of where capital is being spent, London attracted the most investment into the UK with £1.98bn spent in the capital. The north followed with £465m, the south east at £430m, Scotland at £225m, the south west at £110 million.

Rob Stapleton, director in the hotels team at Savills, said: “Deal volume this year has undoubtedly been affected by global political uncertainty and wider global macro issues.

“The UK’s hotels are seen as a relative safe haven for overseas investors, illustrated by the rise in capital from Asia Pacific. We have seen a flight to quality with investors favouring London assets in particular.”

He added: “This trend is expected to continue and whilst the UK’s regional markets have seen lower transaction volumes so far this year, we expect the ripple-effect of historically low yields in London to encourage investors into the more stable regional markets in the search for yield.”

Source: HotelOwner