The UK’s hotel property industry is seeing more investments in the hotel property sector
The hotel property industry in the UK is seeing dynamic growth this year as increase in global travel is forecast for the next year. It is all set to surpass previous years’ figures of £4 billion and reach £5.1 billion by the end of this year, indicating an increase of 25 per cent, according to a report by international real estate advisor Savills. Transaction volumes at the end of the third quarter growth have touched £3.5 billion, which is 6.1 per cent increase on the same period last year.
Overall, the capital has seen massive investments in recent times. There is a general interest in properties from investors based outside the UK. The UK in general; and London in particular, remains the attraction for property investors.
Overseas investments have contributed a major part in hotel investments and more investors are coming to the UK despite brexit uncertainties. Investors from abroad have played a key role in boosting investments in the hotel property sector in London. Apart from this, other parts of the country are also on the radar of hotel property investors. Investors have also shown interest in hotel properties in other regions of the UK due to high comfort levels. Overseas investors have accounted for 38 per cent of total investments in the hotel sector so far in the year 2017. The figure is a sharp rise on the previous figures of 7.3 per cent in 2016.
The major property purchases by international investors include Holiday Inn Manchester City Centre and The Lowry Hotel Manchester. While Holiday Inn Manchester City Centre was purchased by Starwood Capital for £54.5 million, The Lowry Hotel Manchester was bought by Singaporean-based CDL for £52.5 million.
Martin Rogers, head of UK hotel transactions at Savills said that brexit has proved to be beneficial for UK hotel in operational terms. With weaker pound increasing demand from overseas visitors, UK hotels have benefitted from brexit, he said. These figures are set to be move higher in future as international travel is predicted to expand. Being a key destination in travel, UK will continue to attract visitors and UK hotels are expected to see high demand, he said. Rob Stapleton, director in the hotels agency team at Savills said that the rising interest of investors in other regions of the UK is also driven by certain drawbacks in London which include lack of assets and price restrictions. It has been observed that other regions across the UK seem to be more popular among investors where investors are more comfortable with. Investors are particularly interested in properties at Manchester and Edinburgh.
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