UK hotel investment in the first half of 2024 shot up by 210 per cent compared to 2023 levels, data from Cushman & Wakefield has revealed.
In H1 2024, £3.9 billion of hotels were transacted, increasing by £2.6 billion versus H1 2023, 132 per cent against the first half of 2022 and 37 percent compared to the first half of 2019.
Of the almost 200 properties transacted, portfolio deals made up about two-thirds including the Radisson Edwardian portfolio of ten hotels, the Village Hotels portfolio of 33 hotels, the LXi REIT Travelodge portfolio of 66 hotels and the Landsec Accor portfolio of 21 hotels.
London accounted for 55 per cent of major deals by volume. However, outside London, volumes reached approximately £1.8 billion, driven largely by portfolio trades involving regional UK assets.
Yields generally remained stable in the first half of 2024, with slight compression for top-tier deals in high-barrier-to-entry markets. Upscale and upper upscale hotels continue to attract the most investment, reflecting a focus on high-quality assets.
Looking ahead, Cushman & Wakefield notes that while single-asset transactions have remained subdued in the first half of 2024, it expects further deal flow to be driven in part by refinancing pressures, inward movement in interest rates, and greater pricing clarity bringing buyers and sellers closer especially as 2025 draws closer.
Full year volumes are now expected to surpass £5 billion.
What they said
Ed Fitch, head of hospitality UK & Ireland at Cushman & Wakefield said: “Hospitality continues to prove itself a robust performer, with strong topline growth and easing cost pressures, and this in turn continues to attract investor interest. The sector is on track to record very healthy transaction volumes in 2024, driven by a handful of key portfolio deals which have been hard to come by in recent years. There is a great depth of capital waiting to get into the hospitality sector which Cushman & Wakefield expects to sustain deal momentum throughout the year and into 2025 as more product which meets the criteria of that capital comes to market.”