Investors Poured £5bn into Hotel Industry of the UK in 2017

Robin Drayton [CC BY-SA 2.0] via Wikimedia Commons

Investors ploughed £5bn into the hotel sector of the United Kingdom in 2017, as the industry rode high on an inrush of visitors.

According to Knight Frank, a global property adviser, over half of the interest came from the industry’s foreign investors.

The high-level investment signalled a whopping increase of 35 percent on the previous year.

The head of hotels and leisure at Knight Frank, Julian Evans, explained that the accelerated rise was “underpinned by the strong boost in tourism and increased overseas investment, which we expect to continue into 2018.”

More tourists to the United Kingdom were recorded to have been brought in last summer, and visitors increased their spending.

The breakup and shifting of portfolios also contributed to the rise in activity, putting increased single high-value assets up for grabs.

While Knight Frank anticipates that an uncertain climate could result in a slower rate of investment in 2018, Evans said that the hotels in the United Kingdom were still perceived as a strong investment.

He said: “We predict that we will also see infrastructure funds and global investors start to acquire UK hotel portfolios as seed platforms for REIT targets, as they recognise the secure long-term income and covenants offered by the sector, with net initial yields currently at their lowest level on record, and that the debt market will, therefore, remain highly competitive in the year ahead.”