South East Hotel Investment Volumes Break £1 Billion In 2018

SavillsInvestment into South East hotels reached £1.36 billion in 2018, a 39% increase on full year 2017 volumes according to international real estate advisor Savills. The market was dominated by portfolio transactions, however domestic appetite for individual hotel assets remained a key character of the region.

The South East was the most active market outside of London notes Savills, accounting for 20% of the total investment into UK hotels, behind the capital’s 39% share. The North recorded a 17% slice, Scotland 14% and the South West 10%.

Key deals in the region included Aberdeen Standard’s £40 million sale of the 297 bedroom Travelodge at Heathrow Terminal 5 to Sidra Capital and Principal Hotels £24 million sale of the 140 bedroom De Vere Theobalds Estate, Waltham Cross to Aprirose.

Investment into South East hotels was made up of 39 individual assets and components of 15 portfolios. In total, 70% (£957 million) of investment volumes were accounted for by hotels included in portfolio transactions. Individual deals accounted for £403 million of investment, with the average lot size being approximately £13 million. Domestic money dominated the single asset market, with UK investors accounting for 76% of individual transaction volumes. A particular appetite for single asset transactions was seen in the Home Counties and around the M25, with it’s easy access to the capital.

Overseas investment in the South East has been predominantly a result of portfolio deals with large south east components, such as Project Ribbon and the SACO Portfolio, which were bought by Israeli and Canadian investors respectively. In total, overseas investment accounted for £689.5 million of the South East market (51% of overall transaction volumes).

Georgie Liggins, associate in the hotels team at Savills, comments: “The South East continues to attract the lion’s share of investment outside of London. Appetite from visitors is driven by its diverse range of attractions from the beaches of Brighton and Norfolk to the historic market towns of Canterbury and Chichester.”