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The UK Is Europe’s Most In Demand Country For Hotel Investments

The UK Is Europe’s Most In Demand Country For Hotel Investments

Buying hotel rooms for investment are a popular choice for property investors in the UK and overseas. Many overseas investors see the massive potential in the UK’s hotel sector, which is why in 2019 the UK remained the number one hotel investment country in Europe according to CBRE’s Europe Hotel Investment MarketView Q3 2019.

This is great news for UK and overseas investors because many people are hesitant to invest their capital in these somewhat unpredictable times for property, however, savvy private investors, as well as institutional investors, understand that there are still lucrative investments available and those in the hotel investment sector certainly fit the bill.

The UK Is The Best Area For Hotel Investing In Europe

The report by CBRE concluded that the United Kingdom was the most popular destination to invest in a hotel property in the whole of Europe. The UK has taken the top spot for the second year in a row, which is even better news for investors interested in the UK commercial property sector.

It was revealed that the UK overtook Germany in last year’s report (CBRE’s European Hotel Investor Intentions Survey 2017), which surprised many people who predicted that the amount of investment activity in the UK would decrease in the lead up to Brexit.

The UK saw a 106% increase in respondents compared to the previous year’s report, and also revealed that a significant 35% of respondents identified the UK as their most sought-after hotel investment location.

This is reinforced by the amount of investment activity in the sector hitting a record-breaking £5.4 million from UK and overseas investors combined. This represented the highest volume of hotel investment in any country in Europe in 2017!

The countries that followed the UK (35% confidence) on the CBRE European Hotel Investor Intentions Survey included Germany (18%), Spain (16%), France (8%) and Italy (6%).

What This Means For The UK’s Hotel Property Investment Industry

This report is great news for the future of UK commercial property investment. The report not only takes into account investment activity in London but in other regions too.

Paul Collins, the Head of Hotel Investment Properties in UK and Ireland stated, “The UK is attracting a wide range of international investors seeking opportunities in key cities such as London, Manchester and Edinburgh.”

The report also included statistics that provided more of an insight into the breakdown of the most popular areas within the UK. CBRE found that 38% of respondents are targeting predominantly ‘gateway cities’ compared to a slightly lower 36% targeting capital cities and a small but significant 16% targeting secondary cities. Only 9% were targeting resort locations, which CBRE attributes to the lack of investible stock in major European Capital cities and lower yields in main cities.

These numbers suggest that the hotel investment sector is actually fuelled by business travel and as a commercial property investment, hotel investments are insulated from the volatility of the wider residential property market. As a result, traditional buy-to-let investors are being forced to look elsewhere due to the high competition, lower yields and heavier regulation eating into profits and so now is the time to beat the rush and get involved in the UK’s hotel investment market.

There is a great deal of interest in other areas of the UK that are less crowded with commercial investment.

An interesting figure taken from the study reported that 94% of respondents said they plan to invest either the same amount or more capital into a hotel property in 2018 compared to 2017. Although this is a world-wide figure not specific to investing in the UK, it does go to show that the hotel property industry is highly lucrative and attractive to property investors worldwide. This is likely to mean that next year is another big year for the UK hotel investment sector.

Our Exclusive Hotel Investment in Chester, United Kingdom

The Belgrave Hotel in Chester is one of the latest additions to our range of commercial property investments in the UK. This is a unique investment with lots of capital growth potential.

The investment is 100% fully-managed by a professional hotel management company, all the investor needs to do is collect the regular rental income. The benefit of the commercial sector compared to residential is that the yields are higher and assured for longer. This particular hotel investment offers investors a 10% NET yield assured for 5 years. This takes away the risk and uncertainty, as the returns are contractually-assured and the income is paid quarterly.

Over the course of the 5 years of the investment, you could be making a NET return of £32,475, from room rental regardless of occupancy rate – remember you don’t need to worry about renting out the room yourself as this is all done for you as part of the terms of the investment.

In addition, there is an assured buy-back at the end of year 5 at 120% of the purchase price, giving you a substantial profit. The entry price starts at £64,950. Enquire below to reserve a unit before your chance at seeing a total return of £110,415 NET from £64,495 in just 5 short years is gone!

At Sterling Woodrow, we pride ourselves on helping new property investors get a solid start in the market and are happy to speak to you about your long-term goals and ambitions in property investment.

We also work with experienced investors to help them increase the value and profitability of their portfolios.

To book your complimentary property investment consultation with one of our senior portfolio managers simply click the green button and complete the short form and we will call you back at the appropriate time.