Savills research shows that while portfolios have dominated in 2024 we have seen improving activity across single assets. In London, YTD volumes are 91% above the same period in 2023, having previously been a laggard to the regions which saw an earlier recovery in investment activity. Some of the standout deals in Q3 include Pandox acquiring a trio of Residence Inn by Marriott aparthotels from Starwood for a reported £230 million and Millemont acquiring the Yotel Edinburgh, also from a Starwood Capital affiliate.
Tim Stoyle, Head of UK Hotels at Savills, says: “Q3 hotel investment volumes highlight continued investor confidence and improved market sentiment, falling debt costs have been a catalyst to this and we have seen a number of lenders coming to market. We expect this momentum to continue into Q4, as hotels prove themselves to be one of the most resilient and dynamic asset classes within commercial real estate.”
Rob Stapleton, Director, Head of UK Hotel Capital Markets at Savills, comments: “The hotel sector has shown remarkable resilience, bouncing back from market uncertainty with strong investment opportunities. We anticipate full year 2024 figures to surpass £5 billion, bringing activity back in line with 2019 levels. Higher yields compared to other operational asset classes are driving investor interest, with a focus on portfolio and platform transactions. Investors are increasingly targeting structural levers and differentiated business models, with substantial interest in both high quality and budget assets.”
