UK sees increase in single asset transactions

LONDON – Research from real estate advisor Savills indicates that the U.K. hotel investment market had a slower start to 2025 with transaction volumes reaching approximately £1.59 billion in the first half. These muted levels were expected following an exceptionally high volume of portfolio transactions in early 2024. However, market activity remains encouraging, with signs pointing to a stronger second half.

Single asset transactions totaled £1.35 billion in H1 2025, marking an 8.4% year-on-year increase and standing 1.7% above the 10-year H1 average of £1.33 billion. Savills attributes this growth to a shift in investor focus and increased confidence in individual hotel assets.

The largest single asset transaction during the period was Nuveen Real Estate’s sale of the W Hotel in Edinburgh to Schroders Capital for more than £100 million – the largest single asset hotel deal ever recorded in the Edinburgh market. Additionally, the sale of the Ruby Stella by RE Capital to LaSalle for £48 million was another significant transaction that demonstrates the availability of Core capital.

With just over £6 billion of known live opportunities, the U.K. hotel sector remains well positioned to deliver a strong full year performance.

Richard Dawes

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Savills research indicates that if all currently marketed assets, totaling approximately £6 billion in known portfolios and larger single assets, are transacted this year, the market is poised to exceed the 10-year annual average of £4.85 billion.

The largest portfolio deal in H1 2025 was the Alchemy Group acquiring a stake in luxury U.K. hotel and spa group, Barons Eden. Another notable portfolio transaction in the period was Tristan Capital Partners’ purchase of easyHotel’s €400 million portfolio, a multi-country platform with several U.K. assets.

Regional markets have also shown notable momentum. The South West in the U.K. recorded £147 million in transactions, a 95% increase compared to full year 2024, while the West Midlands saw £153 million, up 60% over the same period, highlighting a renewed interest in hotel investment outside of London and the South East.

“While fewer portfolio deals in the first half have weighed on year-on-year volumes, the robust pipeline of assets on the market suggests we will see a more active second half,” said Richard Dawes, director, Hotel Capital Markets at Savills. “With just over £6 billion of known live opportunities, the U.K. hotel sector remains well positioned to deliver a strong full year performance.”