Investors prowl NW hotels market

OVERSEAS buyers are targeting the North West hotels market as soaring prices in London force them to look further afield.

Investors from Asia, Russia and Europe as well as US hedge funds are all on the look-out for hotel businesses, according to speakers at an event organised by pro-manchester and the insolvency trade body R3.

Mark Chambers, whose Lancashire-based company Onecall Hospitality manages 45 hotels throughout the UK on behalf of banks and investors, said he was advising buyers from Dubai, Bangladesh, Russia and Germany.

“They either cannot find what they are looking for in London or they are fed up paying high prices,” he said. “Initially they look to cities like Manchester and Liverpool because they are familiar with them but they are open to a broad range of opportunities outside of the cities.”

Phil Duffy, managing director of the Manchester office of Duff & Phelps, said US hedge funds such as Lone Star and Cerberus which had gained a foothold in the sector by buying groups in need of restructuring were now looking for other investments.

“They are keen to buy small to medium sized hotel groups – either solvent or insolvent – to add to their existing portfolios,” he added.

Kate Deakin of surveyors Christie + Co said hotel values in 2014 were up by 17% on the previous year.

“The market has come back to life, with confidence returning and trading performance strengthened. We expect things will continue to improve as properties bought during the downturn come back on to the market as profitable sales,” she said.

The event, How to Succeed in the Hotel Sector, took place at JMW Solicitors in Manchester.

Richard Wolff, North West chairman of R3 and head of corporate recovery at JMW Solicitors, said: “The hotel industry was one of the worst affected during the downturn. However, according to R3’s figures, now only 18% of hotels in the North West are considered at heightened risk of failure, one of the lowest risk scores of any sector. While smaller independents continue to face tough competition from chains, it’s good to see the industry is bouncing back and attracting attention from investors worldwide.”