By +Eric Jafari
It has been a strong Q1 for the hotel
sector, with investment volumes nearly quadrupling
year-on-year. Savills claims during the first three months of the
year investments totalled £1.9 billion. This is almost four times
more than the £492 million transacted over the same period in 2012.
However, according to Michelle Webb, director of hotel investments
at Savills, this isn't sustainable.
"This has been an exceptionally strong first quarter in the
hotel investment market, boosted by the sale of three significant
portfolios, 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," she
However, 2013 still has the makings of a vintage year for the
hotel sector. There are over £1.2 billion assets currently being
marketed across the UK and Savills believes that even if just a
small proportion of these are sold this year, transactions will
exceed annual levels noted over the past five years.
Overseas buyers are helping to drive the market's performance,
accounting for over 90 per cent of the transaction value. US and
Middle Eastern investors are proving to have the largest appetites
for UK hotel real estate and are looking for portfolios and larger
assets. Conversely, Asian Pacific buyers are going in search of
smaller, single properties.
The hotel market is also benefiting from a greater amount of
financial stability. Ms Webb said: "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."
This is no doubt helping to drive improvements in the regional
market. Earlier this month, the UK Chain Hotels Market Review by
Hotstats revealed hotels outside of London experienced revenue and
profit growth for the first time since 2009 in February. Revenue
per room increased by 1.8 per cent, while total revenue per
available room rose by 2.7 per cent. This led to a gross operating
profit rise of 1.2 per cent.
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19 April 2013
Hotel Investments,Hotel Performance