JLL’s latest quarterly figures on London and regional UK hotel investment trends, shows that there has been a 278 per cent increase in investment into the sector compared to Q3 2013 last year and that North American money is leading the investment charge. Year to date figures are also up on last year with a 29 per cent increase in total investment volumes across the UK market compared to the same period in 2013. In Q3, just over £1 bn, equating to 58 per cent of overall UK investment volume, came from North America investors, a 51 percentage point uplift from Q3 last year when investment from this source stood at just seven per cent.
Investment in London’s hotel market is up by 22 per cent compared to Q3 last year, with some £387 million invested in the capital. The largest investment share into London came from Asian sources, which accounted for 31 per cent of total investment, with Middle Eastern investors accounting for a further 23 per cent. Total hotel investment in London was flat in the first three quarters of this year compared to 2013, which was in part due to the InterContinental London Park Lane deal in Q2 of last year which was the largest sale and manageback ever of a single asset in the London hotel market.
In one of the prime single asset deals of the year, JLL’s Hotels and Hospitality group advised on the sale of the Marriott Grosvenor Square by Strategic Hotels & Resorts, Inc to Hong Kong-based Joint Treasure International Limited for £125m. Other significant deals include the sale of Edinburgh’s Roxburghe Hotel to US based investment management firm, Starwood Capital which is currently the largest post-recession single asset deal in Edinburgh.
Jon Hubbard, Managing Director in JLL’s Hotels & Hospitality group commented: “Whilst London remains a highly attractive market for global investors, the UK’s regions have become a key focus for international investors, reflecting a confidence in the continued recovery and growth of the sector over the coming years. Investors from North America, China and other parts of the Far East are currently the principal sources of international investment, with investors eyeing cities such as Aberdeen, Edinburgh and Manchester. The significant increase in investment from North America in part reflects a reallocation of funds as a result of US real estate becoming more expensive and we predict that this trend will continue.”
