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Resurgence in UK & European hotel transaction activity, Christie & Co report reveals

Specialist business property adviser, Christie & Co, has today launched its annual Business Outlook report, 'Business Outlook 2025', which reflects on key market activity, trends and challenges of 2024 and forecasts what 2025 might bring across the industries in which Christie & Co operates, including the UK and European hotel sectors.

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Carine Bonnejean

Carine Bonnejean

Managing Director – Hotels

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The report reveals a resurgence in UK hotel transaction activity in 2024, with deal volumes tripling and returning to 2018/2019 levels at approximately £6.4 billion. This was principally linked to portfolios, and with London making up 40% of transaction volume. Christie & Co saw an 11% increase in deals agreed and 20% increase in completions in 2024 compared to 2023.

In the context of the wider commercial real estate market, the European hotel sector is an outperformer, attracting significant attention from investors at all levels. European hotel transactional volume in 2024 was up over 50% versus 2023, on par with pre-pandemic levels. The UK leads the market, making up 36% of total deal volume, followed by Spain and France.

The report reveals that market conditions in the UK improved particularly towards the end of the year, with solid trading performances, more liquidity and more certainty around interest rates finally being on a downward trend. The recalibration of pricing and the softening of yields have been progressive since early 2023, and while Budget announcements made by the Labour government last autumn are likely to put pressure on operational margins during 2025, there was a +3.8% increase in Christie & Co’s hotel price index for 2024 and the outlook for the sector remains positive.

Looking to the year ahead, the report outlines Christie & Co’s market predictions:

  • Positive deal volume, but mostly through non-core disposals and individual deals as opposed to portfolio activity as seen in 2024
  • Plateauing of top-line performance combined with cost pressures post-Budget announcements are likely to have a negative impact on profit margins overall
  • Slow yield compression anticipated progressively throughout the year, linked to gradual interest rate cuts
  • No material shift in development pipeline expected due to debt and construction costs
  • Possible uptick in distress due to budgetary increases in payroll, pension and business rates

Carine Bonnejean, Managing Director of Hotels at Christie & Co comments, “Whilst there is continued uncertainty due to geopolitical risks across the globe and the recent Budget announcements for the UK in particular, hotels remain in high demand for investors. 2024 saw a significant comeback of the UK transactional market which boosted European deal volumes. Whilst it is unlikely that similar levels of portfolio activity will be replicated in 2025, pipelines are way ahead of same time last year, and single assets and small portfolios are being prepped for market. Some uncertainty is unavoidable as proven in recent years, but hotels are definitely an attractive investment option for all investor types.”

Click here to read the full report: https://www.christie.com/news-resources/business-outlook-2025/hotels/uk


For further information on this press release, contact:
Jasmine Davis, Corporate Communications Manager
P: 07561 115179
E: jasmine.davis@christie.com


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