Institutions increase exposure to U.K. hotels by over a quarter

The U.K. hotel market defied expectations and saw investment volumes reach £6 billion ($7.8 billion) in 2019, attracting a significant 26 percent uplift in investment by institutional investors, according to the latest U.K. Hotel Capital Markets: Investment Review 2020 report by Knight Frank.

Following an exceptional level of portfolio activity in 2018, last year saw hotel transaction volumes slow by £1.2 billion ($1.6 billion). This represents a 3 percent decline compared to the five-year average owing to lower investment activity linked to Brexit-related uncertainty and a turbulent political landscape, but remains 5 percent above volumes in 2017.

Total institutional investment (both U.K. and overseas) into the U.K. hotel market totaled £2.5 billion ($3.2 billion) in 2019, increasing by over a quarter and accounting for 41 percent of total U.K. hotel investment. This came as U.K. institutional investors more than doubled their investment into the sector to