London invested more in its hotels in 2012 than any other European city, new figures show.
Individual hotel purchases (single asset transactions) and the sale of development sites in the capital boosted an otherwise depressed investment market, according to hospitality consultants HVS.
As in 2011, the majority of investment was in the UK, where transaction receipts peaked at more than £800m, 46 per cent of the total single-asset investment volume across Europe.
A dozen hotels changed hands in London in the first eight months of 2012, the period the report covered, including the four-star Cavendish London, which was sold for just under £160m.
Other hotel development sites sold there included those of the InterContinental Westminster and Hilton Bankside, as well as the Odeon Site, Leicester Square, acquired by the Edwardian Group.
Things were less rosy for Europe as a whole, with HVS stating: “Scarcity of debt and economic uncertainty will continue to dampen investment until at least the end of 2012.”
Tim Smith, HVS London’s director, added: “Trading has been difficult in recent months for many European markets, and even Paris and London have experienced a slowdown.”
According to the report, hotel investment activity in Europe hit £2.8 billion in 2012, a 16 per cent decline on last year. Some 46 hotels valued at more than £6m were sold, a 28 per cent decline, while the total single asset investment volume reached £1.68bn, a 10 per cent drop. Investment in Germany also remained strong, accounting for 15 per cent of total transaction volume.
“Until debt becomes more readily available and trading significantly improves, it is difficult to estimate when the hotel investment market will improve, but we hope to see transaction figures rising during 2013,” said Smith.
Pictured: Tim Smith