Hotel transactions

Interest for inns has been high in UK capital, Manchester, Birmingham, and Edinburgh.The total value of transactions in H1 2018 was £3.2 billion - that is 28 percent more as compared to H1 2017 (as per Savills). The activities of Asian (China, Hong Kong), Indian and Israeli investors grew, and overseas buyers were responsible for at least 51 percent of the total deals in the first half. Israeli made 24 percent of the total investments and Canadian investment was 14 percent. The highest was paid for London hotels where £1.23 billion was given for 11 deals, which included the investment of over £90 million by Indian buyer ABIL Group.

Birmingham is growingly becoming an alternative location for real estate buyers. The city will host commonwealth in 2022 and it has proper transportation and train links, and a number of new public facilities are expected to start in the coming decades. Edinburgh and Manchester were popular in 2017 as a substitute for the capital city, while, Manchester continues to grow.

The inflow of leisure travelers grew in some of the cities in the UK and investors are looking towards opportunities in staycations and holiday homes at popular holiday locations. Leased investment and pension funds are investing in leaseholds, which has been a competitive market.

Hotel investment UK

Investors report by MFS (Market Financial Solutions) claim property sector remains to be a safe option where 18 percent of the surveyed said they would like to buy properties in the coming 12 months. Many believe the impact of Brexit will not be felt on long term investments. Brexit is expected to finalize by March 2019 and many new investors want to grab opportunities in the current slowing market.

Currently, the government is offering tailored solutions and higher flexibility, where the interest rates are low. But there are risks of rising in interest rates, and in the market where demand is more as compared to supply; many local and foreign buyers are seeking deals before the end of Brexit. Investors believe in the post Brexit phase the government will impose tighter credit controls and strict regulations for real estate transactions.

UK hotel investment market

The average rate of homes in London is high as compared to other regions and Asian investors – South Korean investors are finalizing deals before the end of Brexit phase as there are concerns over the change in housing policy, which can restrict foreign investments. The government is preparing to introduce strict lending rules, which can make it difficult for buyers to acquire credit.

Not just the UK and London, investors are buying properties across many other European locations as the returns are attractive. An analysis by CEM benchmarking found the UK and Dutch pension funds are recording a growth of 10.4 percent per annum from its listed real estate investment since 2010. The study on European properties forecasts double growth (as per Netherlands-based bank Kempen). Many new high nets worth institutional investors are targeting healthcare, logistics and self-storage opportunities.

To know more about real estate deals in the UK capital, and other growing cities of Europe, click Hamilton International Estates (www.hamiltoninternationalestates.com).