Report says Yorkshire hotels sector remains buoyant
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The UK hotel market defied expectations and saw investment volumes reach £6bn in 2019, according to the latest UK Hotel Capital Markets: Investment Review 2020 report by global property adviser Knight Frank, which has offices in Leeds, Sheffield and Harrogate.
Yorkshire & Humber region was ranked as the fourth most liquid region in the UK with over £230m of investment accumulated from a total of 19 assets exchanging hands. Some significant branded hotel stock changed hands as a result of various regional portfolio acquisitions.
These included the Hallmark Hull, Hilton Leeds City, Hilton York, The Crowne Plaza Harrogate and the DoubleTree by Hilton Leeds. As a region, the market achieved an average price per room of £116,000, an uplift of 13% compared to the previous year.
Leeds came sixth in the city hotels investment charts in the UK, with Manchester in first place. £100m was invested in the sector in Leeds last year.
Total institutional investment (both UK and overseas) into the UK hotel market totalled £2.5bn in 2019, increasing by over a quarter and accounting for 41% of total UK hotel investment. This came as UK institutional investors more than doubled their investment into the sector totalling over £2 billion.
Shaun Roy, head of hotels and specialist property investment at Knight Frank, said: “We have continued to see a strong demand for secure, long-term fixed income assets which has meant that despite uncertainty within the general investment market, investment into the hotel sector has remained strong, particularly driven by institutional investors.
“Both London and the regions continue to offer attractive propositions and returns for global and domestic investors, who recognise the growth prospects available, whilst significant opportunity exists for investors to take advantage of long-lease ground rents deals which continue to evolve and further strengthen the investment market.
“We predict 2020 will see more portfolios and higher value assets coming to market to capitalise on the growing appetite from UK and overseas institutions.”