UK hotel market investment due to reach over £4billion in 2021
Monday, February 14, 2022
Last year, about £4 billion was pumped into the UK hotel market as the industry hailed the industry's relaxation of travel restrictions introduced by Covid.
Despite the impact of the pandemic on the food and drink sector in Britain, the underlying drivers of higher hotel demand and the ongoing improvement in profitability and visibility for future trade all helped to elevate investor and lender sentiment towards the sector.
Both London and the regional UK continued to provide attractive long-term returns for global and domestic investors.
Transactions in the UK's capital's hospitality sector reached £2.1 billion in 2021, or 54 per cent of total deals in Britain.
Henry Jackson, chief executive of the hotel agency at Knight Frank, said: "With the setback of the Omicron variant having now passed, the strong flurry of transactional activity that occurred during the final quarter of 2021 is expected to continue in the months ahead.
Investment is being lured by an extended period of uninterrupted trading in 2022, improving debt markets and attractive sector diversification, with best in class assets offering strong liquidity and competition in the market.
Funding-focused sales are also more likely, though Knight Frank say no imminent distress. Knight Frank said it remained 'cautiously optimistic "for 2022 and expects transactional activity to be powered by a number of factors, including a stronger asset rotation, as investors prioritize stalled exit plans or bring new assets to the market to capitalize on the upswing in the investment cycle.