London leads EMEA hotel investment market

London leads the European, Middle Eastern and African (EMEA) hotel investment market, according to the latest survey by investment management company, JLL. 

The firm’s Hotel Investor Sentiment Survey shows rising confidence from investors in the London hotel market sector and an expectation of strong trading prospects over the next six months to two years.

Investors have the most confidence in short term trading conditions in London, with 94% of respondents believing that trading will improve.

There is also increasing expectation of investment profitability, with ‘internal rate of return’ (IRR) requirements standing at 10%, compared to 13% in JLL’s last investor survey.

The survey also shows that trading expectations throughout the rest of the UK remain promising. Strong business and leisure demand has driven positive expectations in both Edinburgh and Manchester with good connections from London providing unrivalled access to international markets.

George Nicholas, executive vice president in JLL’s hotels and hospitality team, said: “Improved economic conditions, falling unemployment rates, rising consumer confidence and an increasing number of hotel transactions at the start of the year all led to investors feeling very optimistic about trading expectations in London.

“Currently the demand for hotel investment product is outstripping supply with investment demand being driven from the USA and Asia.”

Of the 31 cities tracked across EMEA all apart from Moscow are expected to show growth in performance over the next six months, with Moscow showing growth further ahead.

After London, investor sentiment is highest in Munich, Amsterdam and Copenhagen.