UK hotel investment transactions in 2024 have already exceeded full year activity in 2023, according to the latest data from Savills.
In Q3 2024, an estimated £626m of deals completed – 54% up on the Q3 2023 figure – taking the current year-to-date total to £3.82bn, surpassing the £1.6bn of deals recorded last year.
Savills predicts year-end volumes will reach £5bn, bringing activity back in line with 2019 levels.
Portfolios have dominated activity in 2024, but Savills also reported improving activity for single assets. In London, investment activity in the year to date is currently 91% above the same period in 2023.
Tim Stoyle, head of UK hotels at Savills, said: “Q3 hotel investment volumes highlight continued investor confidence and improved market sentiment. Falling debt costs have been a catalyst to this and we have seen a number of lenders coming to market. We expect this momentum to continue into Q4, as hotels prove themselves to be one of the most resilient and dynamic asset classes within commercial real estate.”
Rob Stapleton, director, head of UK hotel capital markets at Savills, added: “The hotel sector has shown remarkable resilience, bouncing back from market uncertainty with strong investment opportunities. We anticipate full year 2024 figures to surpass £5bn, bringing activity back in line with 2019 levels.
“Higher yields compared to other operational asset classes are driving investor interest, with a focus on portfolio and platform transactions. Investors are increasingly targeting structural levers and differentiated business models, with substantial interest in both high quality and budget assets.”
