One quarter of 2012 hotel sales involved distressed properties
Some 26% of hotel sales in 2012 involved distressed transactions, according to research by Colliers International Hotels.
The property company said that despite the widely held belief that most hotels were being sold by owners in financial difficulty, the vast majority of hotels deals last year involved new entrants to the market or expansion by existing hoteliers.
Julian Troup, head of Colliers International Hotels, said: "Despite these extremely challenging times, we're encouraged by the increase in the number of new buyers who saw the opportunity to invest in the hotel market after taking a long-term view on an improvement in real estate and recognising the immediacy of trading gains under their ownership."
"Although there continue to be sellers that have to dispose of properties for financial or health reasons, this was surpassed by those who made the decision to sell for reasons such as retirement, or a change of occupation."
Colliers said it was encouraging that 34% of buyers were new entrants to the hotel market, while most of the remaining purchasers were existing hoteliers growing their portfolios or selling one hotel to acquire another, or corporate buyers who planned a change of use.
In forecasting the year ahead, Troup said he expected 2013 to be similar to 2012 in terms of the level of activity and prices achieved. "There are still buyers out there with cash or those supported by bank funding. We have also seen a marginal increase in private equity backed interest, together with new to the market buyers who see the opportunity to acquire and run a hotel underpinned by the comfort of alternative use in the event of the hotel venture not being to their liking."
Despite the challenging trading conditions during 2012, the team at Colliers International Hotels sold 96 UK hotels. Notable multimillion-pound deals included the 196-bedroom Crowne Plaza in Shoreditch; 101-bedroom Vermont hotel, Newcastle, 110-bedroom Royal hotel, Scarborough, and 45-bedroom Swan at Streatley, near Reading.
Value of hotel transactions doubles in first half of 2012 >>
Vermont hotel in Newcastle sold off £9m asking price >>
The Swan hotel at Streatley sold to new hotel group headed by Hugh Osmond >>
By Janet Harmer
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