UK hotel investment volumes for 2014 are on track to exceed £3.5 billion this year with Q1 2014 volumes already totalling £952 million, according to Savills.
£2 billion in market – more coming
The firm notes that there is approximately £2 billion worth of hotel assets in the market currently with many more coming up for sale in the next few months. In particular, the market could see an increase in single asset hotel sales as lenders continue to recover their loans and new owners of portfolios look to rationalise their estates.
Michelle Webb, director of hotels at Savills, comments: “We expect this to be another very active year, with the potential to beat last year’s transaction volumes which totalled £3.9 billion, the highest since 2007. In 2014 we expect a steady flow of assets being sold throughout the year as confidence in buyers’ and sellers’ pricing gathers momentum and operational trading continues to show signs of recovery.”
Savills reports that private equity buyers were the most active in Q1, driven by Starwood Capital’s acquisition of De Vere Venues and the Four Pillars portfolios, closely followed by institutions, with at least ten different institutions buying £189 million worth of budget hotels, mostly leased to Accor, Travelodge or Premier Inn.