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South West hotel sector attracts millions of pounds of investment

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Written by: Hannah Baker | Posted 22 January 2019 16:05

South West hotel sector attracts millions of pounds of investment

Hotels in the South West attracted £620 million of investment in 2018 - a 55 per cent increase on 2017 - according to international real estate company Savills.

The South West accounted for 10 per cent of total UK hotel transactions, with the market mainly driven by portfolio deals, which accounted for £366 million of the total invested in the region.

Meanwhile, individual transaction volumes reached £254 million with an average transaction size of £6 million.

Domestic investors accounted for the lion’s share of investment in South West hotels at £420 million (68 per cent) followed by Israeli investors with £73 million (12 per cent) and French investors with £46 million (seven per cent).

Volumes were dominated by branded hotels, which attracted £145 million of the total.

Read more: South West retailers issue most profit warnings since 2011

Key deals in the region included the sale of the County Hotel in Bath which achieved a price per key - a metric comparing the amount of money spent on building or acquiring a hotel to the amount of rooms in the hotel - of £165,000.

The average price per key for hotels transacted in the South West was £106,000.

James Greenslade, associate in the hotels team at Savills Exeter, said: “Last year was another extremely strong year for the South West hotel market, with a number of portfolio transactions helping transaction values to exceed 2017 volumes.

"Demand for the region’s hotels has been diverse with both strong domestic and overseas demand, underscoring the attractiveness of the sector and its strong underlying fundamentals despite some general economic uncertainty.”

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