Overseas buyers fuel record investment in hotels

INVESTMENT in Scottish hotels quadrupled to a record £900 million last year amid a surge in overseas interest which shows no signs of waning in spite of the Brexit uncertainty.

Property consultancy Savills said international investors were the main drivers behind the dramatic increase in activity in Scotland last year, when they accounted for 76 per cent of the deal value.

The growing interest in Scotland’s hotels partly reflects the fall in the value of the pound since the Brexit vote in 2016, which has made it cheaper for overseas investors to buy Scottish assets.

The £85m purchase of Edinburgh’s Caledonian hotel by Abu Dhabi-based investment firm Twenty14 Holdings was the biggest deal of last year.

Savills said French investors were the most active, with £279 million of deals representing 31% of the total spend.

Ongoing investment demonstrates the strength of the sector

Steven Fyfe, associate director at Savills said: “Buoyed by strong occupancy levels from leisure tourism, the ongoing inward investment of both domestic and overseas capital into Scotland’s hotels market demonstrates the strength of the sector despite ongoing Brexit uncertainty.”

Wi th some deals currently under discussion, Scotland is set to enjoy another year of strong investment.

Edinburgh is normally the first city on the list for overseas buyers that want to move in to Scotland. However, Mr Fyfe noted: “In Glasgow we are seeing the arrival of evermore developers and hotel brands such as Motel 1, Radisson Red and Dalata.”

Swedish investor Pandox AB bought the Radisson Blu in Glasgow for £39m last year.

The 2018 figures cover 35 deals. Investment in 2017 totalled £195m, with 23 deals completed.