South east hotel investment volumes break £1bn in 2018

Investment into south east hotels reached £1.36bn in 2018, a 39% increase on full year 2017 volumes according to international real estate advisor Savills.

The group said the market was “dominated” by portfolio transactions, however, domestic appetite for individual hotel assets remained a “key character of the region”.

The south east was the most active market outside of London, accounting for 20% of the total investment into UK hotels, behind the capital’s 39% share. The north recorded a 17% slice, Scotland 14% and the south west 10%.

Key deals in the region included Aberdeen Standard’s £40m sale of the 297 bedroom Travelodge at Heathrow Terminal 5 to Sidra Capital, and Principal Hotels £24m sale of the 140-bedroom De Vere Theobalds Estate, Waltham Cross to Aprirose.

Investment into south east hotels was made up of 39 individual assets and components of 15 portfolios. In total, 70% (£957m) of investment volumes were accounted for by hotels included in portfolio transactions.

Individual deals also accounted for £403m of investment, with the average lot size being approximately £13m. Additionally, domestic money dominated the single asset market, with UK investors accounting for 76% of individual transaction volumes.

Georgie Liggins, associate in the hotels team at Savills, said: “The south east continues to attract the lion’s share of investment outside of London. Appetite from visitors is driven by its diverse range of attractions from the beaches of Brighton and Norfolk to the historic market towns of Canterbury and Chichester.”

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