At Christie + Co during 2015 we have noticed a considerable upturn in demand for hotel stock from a variety of sources. A considerable amount of the demand is from investors and buyers from overseas and also traditional hotel groups and buyers.
In 2015 Christie + Co sold hotels in the North of England to investors from Thailand, India, China and Russia, many of these overseas buyers already have hotel interests in their native country and are looking to broaden their invest portfolio into the UK and Europe. These investors tend to look for are generally commercial, profitable hotels which are good properties and offer a good return on initial investment.
One of the attractions of investing into the UK is that it is seen as a relatively ‘safe’ economy. Historically overseas investors would look to focus on trophy assets in London, however that market is very popular and arguably ‘overheated’ so the provinces of the UK including the North are becoming increasingly sought after. Hotels are perceived as a relatively safe investment because of the usually good sized property element. The fact that the general UK economy is positive and also general statistics show that tourist levels and hotel demand levels in the UK are improving is also driving demand for hotels.
Hotel groups are also expanding quickly within the North of England with bank funding more readily available. Locations of hotels which have been sold to buyers from overseas or to hotel groups or multiple hotel operators include: Chester, Blackpool, York, Darlington, Sedgefield, Wakefield, Grimsby, Grasmere, Halifax, Southport, Wrexham and Liverpool.
Demand continues to increase and there are hotels which are currently under offer from overseas buyers or hotel groups in Middlesbrough, Cumbria, Liverpool, Greater Manchester, Wakefield and Darlington.
We expect 2016 to actually be an even busier year for hotel transactions as demand continues to increase and we expect to see a return of High Net Worth Individuals looking to buy regional hotels again as the general economy continues to improve.