Scottish hotel sector investment tops 2016 total in just six months

Edinburgh continues to be the key market, says Savills, accounting for 75 per cent (£88.9 million) of year to date volumes. Key deals include the forward funding acquisition of the Marriott Courtyard Edinburgh for £23.2 million by M&G Real Estate in April along with the ground lease sale & leaseback of Safestay Hostel Edinburgh at a net initial yield of 2.46 per cent.

Overseas investors have been particularly active in Scotland, says Savills, spending £46 million across six deals – almost six times higher than that seen in 2016 (£7.8 million).

In Edinburgh these include PGIM’s (US) acquisition of Safestay Hostel, International Hotel Properties Limited (British Virgin Islands) buying Holiday Inn Express and a US investor purchasing The Bonham hotel.

Elsewhere, Chinese group Creation Gem International Ltd has acquired The Isle of Eriska Hotel and Spa while 7 Hospitality (Singapore) has bought Dundee’s DoubleTree Hilton. Savills also points out both the Newton Hotel in Nairn and the Highland Heritage portfolio have been purchased by Indian investors this year.

The firm says this reflects a wider national trend which sees investment by international buyers in 2017 total £1.2 billion, up 13.7 per cent on full year 2016 levels, and in comparison to the £822 million transacted by domestic investors.