Hotel Management Network

Hotel investment activity increases across UK regions

Investors are shifting focus from London and the South East to regional markets like the South West and West Midlands, where transaction volumes are rising.

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.

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.

The 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.