UK hotel investment activity hit £3bn in the first six months of 2024 – 50% more than was achieved in the whole of 2023 – thanks to the return of portfolio transactions, according to the latest data from Knight Frank.
In H1 2024, UK hotel investment activity was more than triple the £990m achieved in the same period in 2023 and 50% up on last year’s full year total of £2bn.
Investment activity was dominated by the completion of several sizeable portfolios transactions including Blackstone’s acquisition of the 33-strong regional Village Leisure portfolio for £850m, Starwood Capital Group’s purchase of 10 Radisson Edwardian Hotels in London for £800m (pictured) and Landsec’s disposed of its hotel portfolio to Ares Management for £400m.
The notable lack of quality, single asset hotels available for sale, resulted in a 19% decline year-on-year in the number of single asset transactions and a 34% decline in the transaction volume.
Knight Frank said the outlook for H2 2024 looked encouraging with a number of other hotel portfolios expected to change hands. The number of single-asset opportunities coming to the market has also increased.
Henry Jackson, partner and head of hotel agency at Knight Frank, said: “The direction of travel for the sector is positive and the volume of portfolio transactions is evidence that the sector remains attractive. An increase in the quality and the number of hotels seeking to transact is expected, as hotel owners who have extended their investment cycles now seek to realise their exit strategies.
“Where a particular asset meets all the investment criteria, we have seen certain buyers willing to pay full prices for these assets. With a strong pipeline of hotels currently in legals, the Knight Frank hotels teams expects this momentum to continue, and an interest rate cut will serve to further enhance the current optimism for investment in the UK hotel market.”
