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The Volume of Hotel Transactions in the UK is Up

Despite all negative forecasts, investors are still interested in hotel market of the UK. During the first three quarters of 2016, the total volume of investment reached £3.1 billion (approximately US$3.8 billion). That is 12% above the average volume of investment during last 10 years.

According to the latest UK Hotel Investment report prepared by Savills, investors are still interested in the UK hotel market despite uncertainties associated with Brexit. Rather than focus on hotels in London, investors now tend to diversify the geography of their business, which has led to boosted activity in the UK regions. August is a traditionally quiet month for hotel investors, but this year the number of transactions was higher than in June. In August 2016, 14 deals with regional hotels were completed, while in July there were made only 5 deals. Some of the biggest deals include the sale of Imperial Hotel in Torquay for £10 million and Kenwood Hall hotel in Sheffield for £6.5 million.

Another trend that has appeared after Brexit – overseas investors do not dominate on the UK hotel market anymore. For the first time since 2011, the UK companies got the lion’s share of transactions (34.6% or £1 billion). The trend is expected to continue as weaker pound makes it less profitable for UK companies to buy hotels overseas. Private individuals have become more active as well. The volume of their transactions in 2016 has reached £340 million (US$417 million), which is almost two times more than during the same period of 2015. The share of overseas investors in the total volume of transactions is 26.3% (£804 million).

13.11.2016

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