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The total transaction value for hotels in London amounted to just over £1bn in 2023, down 36% compared with last year, the lowest in the past decade, according to data from CoStar.
The increased cost of debt and uncertainty around interest rate stability put many deals on hold.
Trades in London accounted for nearly half of total UK volumes as a lack of major portfolio deals kept activity somewhat subdued.
However, CoStar said the return of sizable deals towards the end of 2023 may suggest a turning point in the market with stakeholders seeing more alignment in the deal structure.
Archer Capital B.V. acquired two Hoxton hotels, Shoreditch and Holborn, totalling 430 rooms for approximately £213m (£494,000/room) in December.
Value-add purchases remain a priority, nonetheless, with foreign buyers having a robust appetite for such opportunities.
The past year saw a few deals traded in London which are currently undergoing major works with potential upside value.
KOP Limited’s acquisition of the freehold of the former 103-room Best Western Burns Hotel for approximately £30m (£291,000/room), reflecting a 5% discount on the guide price.
