UK hotel volumes to top €4b in 2014: Savills

UK hotel investment volumes for 2014 are on track to exceed £3.5 bn (€4.2 bn) this year with first-quarter volumes already totalling £952 mln, property adviser Savills has predicted.

The firm notes that there is approximately £2 bn worth of hotel assets in the market with many more coming up for sale in the next few months. In particular, the market could see an increase in single-asset hotel sales as lenders continue to recover their loans and new owners of portfolios look to rationalise their estates.

Michelle Webb, director of hotels at Savills, commented: 'We expect this to be another very active year, with the potential to beat last year’s transaction volumes which totalled £3.9 bn, the highest since 2007. In 2014 we expect a steady flow of assets being sold throughout the year as confidence in buyers’ and sellers’ pricing gathers momentum and operational trading continues to show signs of recovery.'

Savills reports that private equity buyers were the most active in Q1, driven by Starwood Capital's acquisition of De Vere Venues and the Four Pillars portfolios, followed closely by institutions, with at least 10 different institutions buying £189 mln worth of budget hotels, mostly leased to Accor, Travelodge or Premier Inn.