Total hotel transactions in 2025 is expected to exceed the 10-year annual average of £4.85 billion if all currently marketed assets are transacted, Savills says.
The real estate advisor made this prediction following a slower start to the year which saw transaction volumes reach around £1.59 billion in the first half. However, it notes that market activity remains encouraging, with signs pointing to a stronger second half.
The largest portfolio deal in H1 2025 was Alchemy Group acquiring a stake in luxury UK hotel and spa group Barons Eden. Another notable portfolio transaction in the period was Tristan Capital Partners’ purchase of easyHotel’s €400 million portfolio.
Single asset transactions totalled £1.35 billion in H1 2025, marking an 8.4 per cent year-on-year increase and standing 1.7 per cent above the 10-year H1 average of £1.33 billion. The growth was attributed to a shift in investor focus and increased confidence in individual hotel assets, with the largest single asset transaction during the period Nuveen Real Estate’s sale of the W Hotel in Edinburgh to Schroders Capital for over £100 million, representing the largest single asset hotel deal ever recorded in the Edinburgh market.
Regional markets showed notable momentum. The South West recorded £147 million in transactions, up 95 per cent compared to full year 2024, while the West Midlands saw £153 million, up 60 per cent over the same period, highlighting a renewed interest in hotel investment outside of London and the South East.
What they said
Richard Dawes, Director, hotel capital markets at Savills said: “While fewer portfolio deals in the first half have weighed on year-on-year volumes, the robust pipeline of assets on the market suggests we will see a more active second half. With just over £6 billion of known live opportunities, the UK hotel sector remains well positioned to deliver a strong full year performance.”