13 Aug 2014
Investment in UK hotels sector up 65 per cent from last year, Deloitte figures show
BY Chris Dodd
Investment in the UK hotels sector has hit £1.5bn (US$2.5bn, €1.8bn) in the first half of 2014, increasing 65 per cent from levels recorded during the final six months of last year.
Analysis from Deloitte shows deals have been dominated by provincial investments, whereby Starwood Capital bought both the Four Pillars portfolio and De Vere Venues for £90m (US$150m, €112m) and £232m (US$387m, €290m) respectively.
In terms of the whole portion of deals, 70 per cent of the total transaction volume was made up from single properties.
“This is the second strongest start to a year since the peak in 2007,” said Nick van Marken, global head of hospitality at Deloitte.
“Macro-economic fundamentals have finally caught up with investment sentiment, which has further stimulated appetite for the hotel sector.
“We anticipate continued strong interest from investors, but a potential lack of product, given the substantial capital the market has to deploy.”
Deloitte is also expecting the second half of the year to show quality results in terms of sales and investment into the UK hotels sector.
It is expected that interest from the US, Middle East and Asia will boost investment, especially given growing curiosity towards London.
“We expect deals will close more quickly in the second half of 2014, with significant appetite on the part of private equity in particular. The UK hotel sector appears firmly back in favour," added Van Marken.
Last month it was reported that Britain’s heat-wave and a warming economy have given rise to an increase in hotel sector custom, while new openings planned for this year have revealed the growing interest in London’s hotel market, especially in respect of luxury five-star offerings.
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