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Investment into the UK hotel market reached £5.4bn last year, 51% above the 10 year average of £3.6bn.
The figures marked an increase of 32% from 2016 investment which totalled £4.1bn, and according to real estate advisor, Savills, 60% of the transaction value was from individual sales, representing £3.2bn of the total.
The high level of individual transactions is attributed to the break-up of larger portfolios that were bought in 2014 and 2015. Savills noted that average price per key has risen from £104,255 to £145,303 over the last 12 months as investment volumes have increased.
Martin Rogers, head of UK hotel transactions, said: “Last year was a fantastic one for the UK hotels market as appetite for assets came from both domestic and overseas sources. The popularity of the UK has been boosted in 2017 by the rise of the staycation and the stability following the EU referendum in 2016.
“We expect this popularity to continue as hotels move further into the mainstream.”
Key transactions in 2017 included the sales of the London hotels JW Marriott Grosvenor House to Ashkenazy Acquisition Corp, the £80.2m sale of the Sloane Club in Chelsea by Caledonia Investments and the £58m sale of the Holiday Inn Manchester.
In total the UK regions accounted for 58% (£3.1 bn) of transaction value, with London accounting for 42% (£2.3 bn).
The report also highlighted that international buyers accounted for £2.4 bn (44%) of investment into the UK hotel market, with the group being particularly active in the first nine months of the year.
UK domestic buyers, on the other hand, had a slow start to the year however activity picked up in the last quarter and the group accounted for £3bn (56%) of total investment in 2017.
