London Remains Top Target for Hotel Investment

The UK was the most liquid hotel investment market in the Europe, Middle East and Africa (EMEA) region during the first quarter of this year, with assets in London accounting for the bulk of the activity...

The UK was the most liquid hotel investment market in the Europe, Middle East and Africa (EMEA) region during the first quarter of this year, with assets in London accounting for the bulk of the activity. Jones Lang LaSalle Hotels noted transaction volumes in the UK hotel sector hit EUR 784 million (GBP 645.7 million) - or 52 per cent of the total deals concluded in the EMEA. France also put in a strong performance, with EUR 252 million in sales completed in the first three months of 2012.

Jonathan Hubbard, chief executive officer of northern Europe at Jones Lang LaSalle Hotels, commented: "London was once again one of the most active hotel investment markets in Europe and we anticipate further strong interest across the market, including for trophy assets." However, he pointed out the outlook is not as bright for regional UK hotel sectors, highlighting the growing gap between the pricing of assets in the capital and elsewhere in the country. Mr Hubbard described trading conditions in the majority of regions as "weak", adding: "We do not anticipate a significant uptick in transactional activity in those markets in the short to medium term, except where driven by distress."

However, London may not be the only UK hotel market that presents attractive real estate investment opportunities, with Scottish Development International highlighting the potential in the Scotland's luxury sector earlier this month. Kenneth Clark, head of tourism at the organisation, stressed that demand for four and five-star hotels is outweighing supply and pointed out investors could capitalise on this imbalance in the market. He is confident high-end assets in Scotland have "the potential to generate one of the highest returns in Europe", but investment is needed to add to the supply of luxury accommodation. "This presents a great opportunity for long-term investors to benefit from Scotland's quality assets and growing status as a global tourist destination," Mr Clark concluded.

- Thursday 19 April 2012

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