Investors drawn to ‘value for money’ opportunities, says Colliers
SALES of Scottish and UK hotel properties have picked up during the last year, according to new figures from property agent Colliers International.
The firm’s most recent market report, which covers the 12 months to July 2013, revealed a 28% uplift in UK hotel transactions compared to the same period the previous year.
Julian Troup, head of the hotels division of Colliers International, said there has been an increase in demand from private and corporate buyers looking to invest in UK hotels.
Troup said there were “reasons for real optimism”, stating that “in the 12 months to July 2013 we have sold or acquired 91 hotels and hospitality businesses with a combined value in excess of £150 million”.
The Colliers report also highlighted a shift in the purchasing habits of institutional, investor, and private equity-backed buyers, who are said to be showing a preference for more attractively priced large provincial hotels over properties in and around London.
Alistair Letham, director of Colliers International hotels agency in Scotland, said he expects the number of hotel sales transactions north of the border to continue to increase, spurred on by the “likely increase in distressed sales, improved availability of funding and continued acceptance of market realism”.
“We recently marketed three hotels on Skye for sale and received nine offers, all within eight weeks of market launch,” he said. “This was echoed earlier with the Watermill Hotelin Paisley, when seven offers were received at a closing date.
“Interest is coming from local buyers, as well UK-wide and overseas, with many now ‘shopping’ with significant cash investment.
“Properties that offer good value of price as a ratio against turnover also attract good and, often, quick interest as has happened with the Craw’s Nest Hotel in Anstruther, which saw an offer tabled within less than a week of going to the market.
“A further encouraging sign is that hotel development is back on the agenda in Scotland which, coupled with the buzz around the 2014 Commonwealth Games and the Ryder Cup, provide a welcome boost to the hotel sector.
“Additionally, in recent months, the staycation trend and the hot summer has improved investor confidence, as we’ve seen an increasing level of enquiries for leisure based UK hotels.“