The investment volume in hotels increased by 84%

Friday, January 14, 2022

After a bumper fourth quarter of deals worth £1.42billion, last year the volume of UK hotel investment reached £4.14billion in 2021-an 84.3 per cent rise on 2020 and easily past the 15-year average of £4.22billion. After a record quarter of £1.42 billion invested in the UK, that is likely to be £4.14 billion in 2021 - an 84.3% rise on the target of £4.22 billion in 2020, just short of the 15-year average.

UK regional hotel markets saw 'substantial growth' in investment until 2021, adding up to a total of £2.04bn, a volume in excess of 570 percent in 2020. Notable dealings include Goldman Sachs "takeover of the Belfry Hotel & Resort in November for approximately £140 million, and Zetland Capital Partners' acquisition of the Macdonald Manchester Hotel and Macdonald Holyrood Hotel in November 2021.

Foreign investors also remained active in London with the largest holding, representing 44.7 per cent of the total in 2021, including notable deals such as Singapore's Fragrance Group's takeover of Holiday Inn Kensington Forum in December. Total hotel investment in London in 2021 was £2.10 billion, up 1.1 per cent on a year-on-year basis, while the number of transactions in that period increased by 68.4 per cent to 32.

Tim Stoyle, chief executive of UK hotels at Savills, said: "The hotel sector has had a resilient year with strong momentum in the final quarter showcasing the appetite for UK hotel assets.