Confidence returned across the hotel industry and transactional activity accelerated in 2014 resulting in average business property prices in the hotel sector increasing by 17.2%.
This is according to the annual Business Outlook 2015, published by property advisor Christ + Co, which found investors from North America coming into Europe were principally responsible for driving this price increase.
Chris Day, managing director at Christie + Co, said: “We saw trading performances gradually strengthen and funding become more available. A number of portfolio deals were transacted during the year and in the majority of cases we were able to drive prices and exceed initial expectations.”
During 2014 hotel owners and debt holders rushed to capitalise on the hunger for hotels, which are seen to offer attractive returns and opportunities to add value, according to Christie + Co.
Sale prices were driven forward and the sale of 21 Holiday Inn hotels to Kew Green Holdings provided just one example.
Christie + Co reported that it had the busiest week of the company’s history in 2014, selling 42 hotels with a total value of more than £500m.
Looking forward to 2015, Day said: “There remains equity looking for more investment opportunities and plenty of buyers around who are willing and able to complete deals and so we can expect more opportunities to come to market. I think we can expect more single assets to come to market as hotel portfolios are rationalised.
“The condition of hotel assets should also continue to improve, as banks and stakeholders recognise the power of customer feedback and reviews and the necessity of capex [capital expenditure].”