News > Business

London continues to dominate UK hotel transaction market

By Peter Ruddick , 23-Aug-2012

Related topics: Business, Venues, Trends & Reports, Hotels

The value of activity in the UK hotel transaction market doubled in the first half of the year while London continues to dominate deals, according to new figures from Deloitte.

The sale of the Hoxton Hotel was one of the deals that helped to double the value of UK hotel transactions in the first half of the year

The sale of the Hoxton Hotel was one of the deals that helped to double the value of UK hotel transactions in the first half of the year

The business advisory firm revealed hotel transaction activity totalled around £1bn in the first six months of the year; more than double the figure for the same period in 2011.

Individual hotels

Nick van Marken, global head of advisory, travel, hospitality and leisure at Deloitte said the jump was a continuation of a trend which began in the latter half of last year and was driven by 'single asset transaction' or sales of individual hotels.

"Single asset transactions dominate and London remains the focus for most investors. The lack of readily accessible debt financing remains an on-going constraint and has made it difficult to close on large portfolio deals in particular," he said.

Less than a third of the deal activity in the period was as a result of the sale of groups or portfolios of venues compared with 70 per cent a year ago.

The analysis backs up a similar study released by global real estate services firm Jones Lang LaSalle in April which reported the UK was leading the hotel investment market in Europe but more 'creative transactions' were prevalent with less cash deals being finalised.

London

Unsurprisingly the capital remains the focus of the hotel transaction market with the city accounting for around 55 per cent of total investment value in the first six months of the year.

The notable sale of the Hoxton Hotel to Ennismore Capital  for an undisclosed sum in order for the boutique investment firm to drive brand growth was one of the headline deals which helped cement London's position as the hotel transaction capital.

Meanwhile in the regions activity was dominated by high-net-worth individuals and property groups making purchases. 

Activity Doubles: Some of the significant deals leading the growth in UK hotel transaction activity include: 

Turning to the future, van Marken predicted the difficulty to obtain financing would continue to dominate UK hotel transaction activity with sellers favouring cash buyers or those not totally reliant on bank financing.

"We may see more portfolio deals coming to market and certainly several possible transactions are being mooted. This said, difficulties in accessing debt funding and the continued disparity between buyer and seller in terms of price expectation mean disposal processes are likely to continue to be longer and more difficult to complete," he concluded.

BigHighlights

National Restaurateurs’ Dinner 2014: in pictures

National Restaurateurs’ Dinner 2014: in pictures

The 27th National Restaurateurs’ Dinner (NRD) took place at the Dorchester on Tuesday, helping raise over £80,000 for...

Travellers’ Choice: Top 10 UK tourism hotspots

Travellers’ Choice: Top 10 UK tourism hotspots

London is the third-best travel destination in the world, according to TripAdvisor’s sixth annual Travellers’ Choice awards...

#AskMark: Our inspiring Twitter Q&A with Mark Sargeant reviewed

#AskMark: Our inspiring Twitter Q&A with Mark Sargeant reviewed

Whether it was his advice for young chefs, his memories of working with Gordon Ramsay or his...

Business Profile: Ping Pong

Business Profile: Ping Pong

Ping Pong’s change-of-location strategy and design brief move it a step closer to bringing dim sum to...

Development Chef Awards 2014: In Pictures

Development Chef Awards 2014: In Pictures

The Farm Frites Development Chef Awards 2014 took place in London yesterday, recognising and rewarding the best menus, dishes...

Find us on Facebook

Digital Edition - Restaurant Magazine

Access to the Restaurant Magazine digital edition