Christie & Co sells more hotels than any other broker and has an unrivalled level of market intelligence compiled over more than 80 years.
The UK hotel market has seen increased transactional activity since the end of 2013 which was initially fuelled by the US Opportunity Funds and Private Equity investors. This investment interest however, has subsequently been augmented by hotel investors from the Middle East and more latterly, Asia.
In 2014 US hotel investors were predominantly looking for large scale portfolios and platform opportunities as they strived to capitalise on the resurgent provincial UK trading market and attractive yield profiles. Recently, however, there has been a shift in focus from these investors as they seek to identify single asset opportunities to bolt onto existing portfolios. Through 2015, we saw portfolio buyers from Asian markets looking to acquire strategic platforms in order to satisfy the requirement for the development of capital outside Asia and fulfil increasing tourist demand coming from the Asian sector. In reference to Asian investors, this includes countries such as Singapore, Hong Kong, Macau, Thailand and Malaysia etc., as well as China.
Typically the more attractive properties to hotel investors are those which either currently trade under, or have the potential to be rebranded to a recognisable international hotel brand. We have also witnessed a desire from an increasing number of investors to purchase hotels requiring capital investment with the intent to reposition the hotel and its market, therefore benefiting from the resultant improvement in financial trading characteristics and consequently, overall value enhancement.
The provincial UK trading market is continuing to change as certain markets experience significant growth on previous years, an outcome derived by corporate and leisure business returning from the depths of recession. This has led to consecutive years of RevPAR escalation, whereas London's growth has remained fairly flat (from an already high base of Occ and ADR). This has resulted in investors focusing their attention more and more on provincial UK assets as their preferred investment targets, while London remains the focus of attention for the “trophy” seekers.
If you are thinking about your next property investment and require specific performance and transactional activity to uncover potential sales or purchase opportunities, please contact our team.