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UK hotel investment set to exceed £5bn by end of year

Transaction volumes in the UK hotel real estate market reached c. £732m in Q3 2024 as investment momentum continued albeit at a slower pace relative to the first and second quarters of the year, according to Cushman & Wakefield.

The third-quarter volume represented a 93% increase on the same period in 2023, fuelled primarily by single-asset transactions in London, which accounted for 51% of the total, as well as Edinburgh, and smaller sales across the UK regions. This contrasts to the large-scale portfolio deals which accounted for two-thirds of the deal volume during the first half of 2024.

On a cumulative basis, year-to-date investment volumes reached £4.7bn at the end of Q3 2024 – 181% higher than the same period in 2023. A total of 30 properties representing more than 3,900 rooms transacted in Q3 2024, bringing the year-to-date total to 230 properties (representing c. 25,500 rooms) to have changed hands in 2024.

Regional UK hotels have outperformed London, achieving higher RevPAR growth in year-to-date 2024.  

Jack Wallsworth, from Cushman & Wakefield’s hospitality capital markets team, said: “We’re now experiencing a greater bullishness to get deals done, fuelled by a greater meeting of minds between buyers and sellers on pricing, the ability to price in base rate compression, and the general resilience of hotel performance.”

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