Large portfolio sales helped boost total investment in the French hotel market from €1.5 bn in 2011 to €2.1 bn in 2012, according to Savills.

Large portfolio sales helped boost total investment in the French hotel market from €1.5 bn in 2011 to €2.1 bn in 2012, according to Savills.

The two main factors in the 40% year-on-year increase in investment volumes were the good level of supply and the return of foreign investors, the property adviser said in its latest French hotel market report.

The market was fuelled by the sale of five large portfolios representing approximately 75% of the total amount invested since the beginning of the year.

Paris and the Riviera remained the key centres for hotel investment activity accounting for more that 85% of the total volume. In the regional markets where conditions can be challenging, activity remains subdued and sporadic. The firm also reports that yields for the sector have remained stable over the past 12 months, ranging from 4.5% to 7.5%.

Boris Cappelle, head of investment at Savills France, added: 'Off the back of such a successful 2012, we predict that 2013 will continue to see a good level of investment in the French hotel market, fuelled by portfolio deals and interest from overseas investors.'