Scotland ranked as regional UK's most attractive hotspot for hotel investment in 2018

Scotland and in particular it’s prime cities were ranked as regional UK’s most liquid region for hotel investment in 2018, recording approximately £900 million investment, with some 5,400 rooms changing hands.
Written By:
Philippa Goldstein, Knight Frank
2 minutes to read
Categories: Hotels UK

Knight Frank’s latest research report, UK Hotel Capital Markets Investment Review 2018 – reveals that Scotland’s prime cities recorded over £850 million of transactions, from some 31 deals. Edinburgh accounted for over 60% of the investment in Scotland’s prime cities, with transactions totalling around £525 million.

This level of activity secured Edinburgh’s position as the most attractive regional UK city for hotel investment in 2018, with a 13% share of the UK regional investment market. Edinburgh also achieved the highest price per room sold for regional UK, with an average selling price of £239,000 per room. 

Also contributing to Scotland’s prime cities 1st place regional ranking, was the city of Glasgow, which was ranked as the 3rd most active regional UK hotel market, with some 12 assets transacting, totalling around £275 million, approximately £143,000 per room. 

The sale of the Principal Hotel group was largely responsible for propelling Scotland into the leading position, with four out of the 12 assets located in Scotland, totalling some 795 bedrooms, with an average price per room sold of around £350,000 per room.  

The South East of England was ranked as the UK’s second most fluid region for hotel investment, with transactions totalling approximately £675 million. Despite over 50 hotels transacting in the region representing some 6,000 rooms, the region was responsible for some of the smaller lot sizes, with an average selling price of £112,000 per room. 

The North West region recorded total transactions of around £630 million, securing the position of the 3rd most active UK region for hotel investment, with an average price per room sold of £143,000 per room. The city of Manchester recorded investment of over £325 million, which accounted for 52% of the region’s investment volume and 8% share of the total regional UK hotel market.

This level of activity secured Manchester’s position as the second most popular regional UK city in which to invest, with some six hotels transacting at an average selling price of £235,000 per room. 

The city of Liverpool recorded investment totalling around £160 million and represented 25% of the investment volume in the North West of England. Liverpool was the 4th most active regional hotel market, with five hotels changing ownership, averaging £163,000 per room sold.

Meanwhile, Cumbria, also located within the North-West region witnessed nine hotels transacting, with an average selling price of £120,000 per room.

Whilst Cumbria only accounted for 5% of transaction volume in the North-West region, 90% of the transactions which took place, involved an overseas buyer. These acquisitions therefore highlight the increased liquidity of the Lake District and the growing appeal of the region to international investors, following its award of Unesco World Heritage Status during the summer of 2017.

For further detailed insight, the latest edition of Knight Frank’s UK Hotel Capital Markets Investment Review 2019 is out now. Download: