The UK hotel investment market experienced notable growth in the first half of 2025, with single-asset transactions reaching £1.35 billion, marking an 8.4% increase compared to the same period in 2024.
This performance also surpassed the 10-year average for H1 transactions, which stands at £1.33 billion. Savills attributes this uptick to a shift in investor focus towards individual hotel assets, reflecting increased confidence in the sector.
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Edinburgh’s w hotel sale leads notable transactions
Among the significant deals, Nuveen Real Estate’s sale of the W Hotel in Edinburgh to Schroders Capital for over £100 million stands out.
This transaction is reported as the largest single-asset hotel deal ever recorded in the Edinburgh market.
Additionally, the sale of the Ruby Stella Hotel by RE Capital to LaSalle Investment Management for £48 million further demonstrates the availability of core capital in the market.
Regional markets show increased investor interest
Regional markets have also demonstrated strong performance.
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By GlobalDataThe South West recorded £147 million in hotel transactions during the first half of 2025, a 95% increase compared to the full year of 2024.
Similarly, the West Midlands saw £153 million in transactions, up 60% over the same period, highlighting a renewed interest in hotel investment outside of London and the South East.
Outlook for the second half of 2025
Looking ahead, Savills projects a robust second half for the UK hotel investment market.
With over £6 billion in known live opportunities, including both single assets and larger portfolios, the market is poised to exceed the 10-year annual average of £4.85 billion if these assets transact this year.
This optimistic outlook is supported by a strong pipeline of assets and a growing investor appetite for hotel investments across the UK.
Overall, the UK hotel investment market in 2025 is characterised by increased activity in single-asset transactions and a broader interest in regional markets, positioning the sector for a strong performance in the latter half of the year.
