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Spectrum Corporate Finance is delighted to announce that James Mines has recently been promoted to director within the firm. This promotion brings the director team at Spectrum to six, reaffirming the firms position as the largest and most experienced independent corporate finance boutique in the South, focused on lead and debt advisory.
Investment into hotels in the south east and home counties reached £246 million across 20 transactions in the first half of the year according to international real estate adviser Savills. The market remains strong for hotels in the area, with the volume remaining in line with that transacted for the same period in 2016 (£240m).
Savills notes there is currently around £178m of hotel stock on the open market in the region. The south east and home counties accounted for 29% of regional UK transactions, while the UK total, driven by London, stood at £2 billion for H1. This is ahead of the south west and Scotland, but behind the north which accounted for 36% of transactions (£304m).
The market has been characterised by individual sales, predominantly in the £1m to £10m bracket which accounted for 50% of transactions in the region. Seven transactions took place for assets between £10m and £20m and three for assets between £20m to £30m.
Martin Rogers, head of UK hotel transactions at Savills, commented: “The hotel market has had a strong start to the year as the sector remains resilient to the headwinds of the last six months. The south east region is no exception, with single asset investors boosting the market as they seek long term income.”
Vacant possession transactions and management contract transactions have dominated the market according to the firm. Buyers have been growing their UK-wide portfolios, with many new entrants to the market instructing management companies to add weight to the assets.
Georgie Liggins, surveyor in the hotels team at Savills, added: “The south east and home counties area is a historically well-performing market, benefitting from it’s proximity to London and the coast. The first half of the year has been testament to this, with investor demand being buoyed by the growing staycations market as the public turn their attention to holidays and experiences in the UK.”
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UK growth will continue to struggle this year and next, as consumer spending feels the squeeze from rising inflation and muted earnings growth. However the economy’s medium term outlook is now looking stronger than it did three months ago, with the general election result increasing the likelihood of a more business friendly Brexit, says the latest EY ITEM Club summer forecast.
With the UK’s exit from the EU on the horizon, business advisers James Cowper Kreston wanted to understand how, or if, its clients’ businesses had been affected.
Savills notes the hotel investment market in H1 was driven by London and individual sales as overseas investors continued to demonstrate considerable appetite for the sector.
The capital remains the largest market, accounting for 55% of transactions by value (£1.1b). Individual sales accounted for 92% of transactions by value (£1.834b), however a number of high-profile portfolios are expected to come to the market in the second half of the year. Overseas investors have been particularly active with an appetite for big-ticket lots, accounting for £1.2b in the first half of the year in comparison to the £822m transacted by domestic investors.
Martin Rogers, head of UK hotel transactions at Savills, said: “The UK hotel market has had a strong start to the year as the sector remains resilient to the headwinds of the last six months. The favourable exchange rate has attracted overseas buyers that are looking for stable, long term income. The anticipation of a softer Brexit will provide further comfort, encouraging development and relieving pressure on staffing.”
The firm highlights key deals for the first half of the year include the sale of the South Place Hotel in London, the sale of the Holiday Inn in Manchester city centre and the on going sales by Lone Star from its Project Solstice portfolio. Larger single asset deals have driven the market in the first half of the year, and as such average price per key in the UK has risen from £119,317 to £147,077 over the past 12 months.