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Scotland saw hotel transaction volumes (sales of £1m+) reach £431m in 2024, up 38% on 2023 and considerably higher than the 10-year average of £282m, according to Savills.
Overall, Scotland accounted for circa 7.50% of all UK hotel deals last year, the highest total outside of London.
Savills also noted that Edinburgh hotel deals made up £251m, representing 58% of the Scottish total.
Key deals included Pandox buying the DoubleTree Hilton in Edinburgh city centre for £49m and Millemont purchasing the Yotel in Edinburgh both from Starwood. Elsewhere, in Glasgow Swiss Life bought the Maldron Hotel for £33m.
The sale of a number of these “well-known” hotels across Scotland saw single asset volumes reach £286m.
In turn, 33% of transactions accounted for portfolio allocations including the sale of the Village Hotel platform acquired by Blackstone, KKR and Baupost, with operating partner Amante, acquiring the 33-hotel Marriott Portfolio and Ares’ acquisition of 21 Accor hotels.
In terms of buyer profile, Savills figures showed that 40% of purchases in 2024 were from domestic buyers, a significant decrease on the 77% seen in 2023. This is due to US buyers making large portfolio acquisitions.
International capital, then, accounted for 60% from locations including the US, Sweden and the UAE. This increase can be attributed to sustained revenue per available room (RevPAR) in recent years.
Looking at the year ahead, Savills anticipates another “strong year” for the Scottish hotel sector with a number of sale processes already underway, including Nuveen Real Estate’s sale of the W Hotel in Edinburgh.
Additionally, there are a number of highly anticipated openings and up to 1,500 rooms in development, such as Cheval Maison in Glasgow, the Hoxton and the Jenners Building, both in Edinburgh. Scotland is, therefore, expected to remain one of the “highest performing” hotel markets outside of London in 2025.
Steven Fyfe, hotel capital markets director at Savills Scotland, said: “Once again, Scotland performed exceptionally well in 2024 and we continue to see year-on-year increases in transaction volumes, reflecting the strong RevPAR growth in key markets. Private equity confidence has been central to this recovery, with significant investments made by Starwood Capital, Blackstone and KKR, among others. This is because the sector remains supported by solid fundamentals, serving as an inflationary hedge and offering continued international appeal.
“In particular, Edinburgh remains a global tourist destination, which we have seen in the higher than average number of single asset sales. It is also uniquely placed to cater for various products including serviced apartments and hostels, making the city especially appealing to investors looking to enter the market. With all this in mind, we expect transaction volumes will continue to outpace the 10-year average in 2025.”
