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UK: Analysis from property consultancy Knight Frank shows that hotel investment in the UK during the first six months of 2024 totalled £3 billion, bolstered by portfolio transactions.
Major deals in the first half of the year include Blackstone’s £850 million acquisition of the 33-strong Village Hotels portfolio; Starwood Capital Group’s £800 million purchase of 10 Radisson Edwardian Hotels in London; and Landsec’s £400 million disposal of its hotel portfolio to Ares Management.
The £3 billion investment marks a significant increase from the same period in 2023 (£990 million), and sits 10 per cent lower than the pre-pandemic level (H1 2019).
US investors have been driving transaction volume, accounting for 77 per cent of the total UK investment activity. London has also seen the most activity with around 70 per cent of investment focussed on the capital.
Henry Jackson, partner and head of hotel agency, Knight Frank said: “The direction of travel for the sector is positive and the volume of portfolio transactions is evidence that the sector remains attractive. An increase in the quality and the number of hotels seeking to transact is expected, as hotel owners who have extended their investment cycles now seek to realise their exit strategies. Where a particular asset meets all the investment criteria, we have seen certain buyers willing to pay full prices for these assets.
“With a strong pipeline of hotels currently in legals, the Knight Frank hotels team expects this momentum to continue, and an interest rate cut will serve to further enhance the current optimism for investment in the UK hotel market,” he added.
According to Knight Frank, there is evidence to suggest that stakeholders are increasing the pressure on owners to bring assets to the market at deliverable levels for a more timely sale.
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