Hunger for hotels leads to 17% property price rise

The property adviser's Business Outlook 2015 report shows how hotel owners and debt holders rushed to capitalise on the 'hunger for hotels' leading to Christie & Co having its busiest week in this area in its 80-year history. 

During one week in 2014, the agent sold 42 hotels with a total value of more than £500 million.  

Managing Director Chris Day called the pace of growth 'dramatic' during 2014.

 “We saw trading performances gradually strengthen and funding become more available. A number of portfolio deals were transacted during the year and in the majority of cases we were able to drive prices and exceed initial expectations," he said. 

The firm said buyers were bidding 10 to 15 per cent higher than guide prices to secure property during 2014 and there were no signs it would be different in 2015. 

 “There remains equity looking for more investment opportunities and plenty of buyers around who are willing and able to complete deals and so we can expect more opportunities to come to market." he said. "I think we can expect more single assets to come to market as hotel portfolios are rationalised. 

“The condition of hotel assets should also continue to improve, as banks and stakeholders recognise the power of customer feedback and reviews and the necessity of capex.”

Restaurants and pubs​

The value of property in the restaurant and pub sectors also rose last year.

Average restaurant prices were up 11 per cent with interest coming from both independent operators and chains while the average sale price for a pub was up 8.6 per cent. 

Christie & Co said a record number of pubs were being sold for continued use with 80 per cent of them remaining pubs. Average sales in London were up 29 per cent while they were also high in the south east (15 per cent) and the south west (9 per cent).