International real estate advisor Savills has reported that total transaction volumes in the UK hotels market reached £1.89 billion in Q1 2015, marking an increase of 47% on the same quarter last year.
The firm also highlights a substantial rise in portfolio acquisitions and disposals, which accounted for 65% of hotel transactions in the first quarter compared to 28% in Q1 2014. The largest portfolio transaction of the year to date was Lone Star’s £676 million purchase of the Jury’s Inn chain, while Cerberus acquired the LRG2 portfolio comprising 18 Holiday Inns for £225 million.
Additionally, Savills notes continued investor appetite for regional hotel assets with only 34% of transactions taking place in London during Q1 2015 compared to 47% in the same quarter last year. Key regional transactions included Ability Group’s £20 million acquisition of the Park Inn by Radisson in Manchester and Marathon’s £27.5 million purchase of the DoubleTree by Hilton in Chester.
Martin Rogers, hotels director at Savills, comments: “Last year saw UK hotel transaction volumes reach an eight-year high at £6.1 billion and investor confidence has remained strong throughout the first quarter of 2015. Given the large volume of portfolios currently in the market, we are anticipating another robust year.”
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