The UK hotel investment market got off to a slow start in 2025 with transaction volumes reaching approximately £1.59bn in the first half of the year, according to new data from Savills.
However, the company anticipates a stronger second half of the year with £6bn of assets currently being marketed, which could see the full-year figure exceed the 10-year average of £4.85bn.
Single asset transactions totalled £1.35bn in H1 2025 – a 8.4% year-on-year increase and 1.7% above the 10-year H1 average of £1.33bn.
The largest single asset transaction during the period was Nuveen Real Estate’s sale of the W Hotel in Edinburgh, to Schroders Capital for more then £100m. Other notable transactions included the sale of the Ruby Stella by RE Capital to LaSalle for £48m (pictured).
Significant portfolio deals in H1 2025, included the Alchemy Group acquiring a stake in Barons Eden and Tristan Capital Partners’ purchase of easyHotel’s €400m portfolio.
There was renewed interest in hotel investment outside of London and the South East with the South West racking up £147m in transactions – a 95% increase compared with full-year 2024 figures – and the West Midlands recorded investment activity of £153m – up 60% on the same period last year.
Richard Dawes, director in the hotel capital markets team 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 £6bn of known live opportunities, the UK hotel sector remains well positioned to deliver a strong full year performance.”
