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Hotel du Vin
2013 looks set to blow the hotel sector away. According to new data from Savills investment in the sector in Q1 this year quadrupled compared to last year, hitting a new total of £1.9 million compared to £492 million worth of transactions in Q1 2012.
Michelle Webb, director of hotel investment at Savills, comments: "This has been an exceptionally strong first quarter in the hotel investment market, boosted by the sale of three significant portfolio, the Hotel du Vin/Malmaison, Principal Hayley and Marriot which had all been on the market for some time, as well as the recent sale of the InterContinental London Park Lane.
Whilst we don't expect this intense pace of sales to continue, there are currently over £1.2 billion of hotel assets being marketed across the UK and even if a small proportion of these transact this year, sales should easily exceed the annual levels we've witnessed in the past five years."
The market has become dominated by foreign investors, who accounted for some 90% of the total transaction volume in Q1 2013. Breaking it down Savills said investors from the US and Middle East are particularly active in the market for portfolios and larger assets, while Asian Pacific investors are chasing smaller single assets.
Savills reports that roughly half the value of hotel transactions in Q1 2013 was in the regions including the majority of the Marriott and Principal Hayley portfolios as well as the Malmaison and Hotel du Vin portfolio.
Michelle continues: "The main shift over the past six months is that we are finally seeing a consensus between buyers and sellers regarding pricing in the regions, especially with the banks who have become more committed to clearing their balance sheets and realistic about the value of these properties."
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