Wednesday 13 January, 2021
UK hotel investment declines 70 per cent in 2020
Knight Frank’s Hotel Transaction Trends 2021 research reveals that investment volumes in 2020 reached £1.8 billion in the United Kingdom compared to £6 billion in 2019, with 81 per cent of the transaction volume occurring in quarter one.
EDITOR'S COMMENT
13•01•21 Welcome to the new-look Boutique Hotel newsletter!
UK hotel investment volumes for 2020 dropped by more than £4 billion compared to 2019 - a not-so-shocking statement given the economic repercussions of the Covid-19 crisis. Research from real estate consultancy Knight Frank reveals that assets were smaller in size and lower in value than what would traditionally transact under normal trading conditions, including The Ritz which sold for half its market price and contributed £750 million to London's total investment of £1.4 billion.
Spurred by the rise in domestic leisure travel, especially over the summer, investor sentiment became geared towards coastal and drive-to destinations. Whilst demand for hotels in these locations will likely continue into the second half of 2021, Knight Frank's data is a strong indicator that London and other gateway cities like it remain attractive to investors. Qatari, Israeli, USA, Singaporean, Thai and European investors accounted for 63 per cent of the total UK hotel deals; a promising sign that overseas interest in the UK is steady albeit down in volume.
To illustrate this, Boundary House in London has been acquired by Austrian hoteliers Rudolf and Christian Ploberger, who plan to develop a 300-bed hotel with serviced offices. In other areas of the country, Liverpool's Urbanista hotel has come to market through Christie & Co. These two sites, amongst others, are opportunities to run successful businesses in locations that will be reactivated and revived when travel resumes.
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