Investment in North West hotels for the first half of 2017 totalled £201m according to figures from consultant Savills, as the weak pound led to a surge in interest from overseas buyers.
Across the North as a whole, hotel investment volumes reached £304m across 30 deals, representing 36% of the £844m total for all UK regions outside London. The South East’s percentage of deals was 29%, the South West’s 24% and Scotland’s 11%.
London’s market outstripped the rest combined, with investment volumes reaching £1.1bn in the first half, accounting for 55% of all UK hotel transactions by value.
Tom Cunningham, hotels director at Savills in Manchester, said: “For investors looking outside of London, the hotel market in the North West is particularly attractive due to the prices and returns available.
“The bigger towns and cities of the region offer a strong corporate and leisure trade, leading to high occupancy rates. We expect trade to remain positive for the foreseeable future.”
Overseas investors were to the fore, snapping up £1.2bn of hotel assets in H1, compared to £822m transacted to domestic investors.
Savills picked out The Hotel Collection’s £12.8m sale of the Imperial Hotel, Blackpool to Singapore-based Fragrance Group among the key hotel transactions it has acted on this year. The firm was also involved in the sale of Ramada Plaza Southport to Bliss Investment Partners.
Other notable deals in the sector included Topland’s sale of the Holiday Inn Express in June to Hlap Hoe for £26m, and Starwood’s April purchase of the Holiday Inn on Aytoun Street Manchester for a reported £58m.
Martin Rogers, head of UK hotel transactions at Savills, adds: “The UK hotel market has had a strong start to the year as the sector remains resilient to the headwinds of the last six months. The favourable exchange rate has attracted overseas buyers that are looking for stable, long term income.
“The anticipation of a softer Brexit will provide further comfort, encouraging development and relieving pressure on staffing.”