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investment , amounting to £ 3.14 billion . High-profile deals included Blackstone ’ s acquisition of Village Hotel and KKR and Baupost ’ s purchase of 33 Marriott properties .
Portfolio investment volumes alone surged 582 % year-on-year . Even compared to the 10-year annual average , portfolio volumes in 2024 were up 61 %, further highlighting the sector ’ s resilience .
Portfolio deals accounted for 57 % of investment volumes and saw more than 20,000 hotel bedrooms acquired by private equity or overseas buyers , a study by Knight Frank revealed . Some of the notable transactions included Landsec ’ s disposal of the 21 AccorInvest hotel portfolio to Ares Management for £ 400 million ; and Starwood Capital Group ’ s £ 800 million acquisition of 10 Radisson Edwardian Hotels .
Regional hotel transactions played a pivotal role , totaling £ 3.34 billion , or 58 % of the total investment volume , representing a 217 % year-onyear increase . London was no slouch , with transaction volumes rising 105 % year-onyear to £ 2.4 billion , according to Savills . Significant deals in London included the sales of Six Senses London (£ 180 million ), The Standard (£ 185 million ) and Motel One London Tower Hill (£ 56 million ).
“ In 2024 , the U . K hotel market demonstrated resilience , with investment
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activity resurging . Private equity confidence has been central to this recovery , with significant investments made by Starwood Capital , Blackstone and KKR , as well as a number of others ,” said Tim Stoyle , head of U . K . Hotels at Savills .
“ The sector ’ s strength is supported by solid fundamentals , including its role as a robust inflationary hedge , its resilience as an asset class and its continued international appeal .”
Investor sentiment remains optimistic heading into 2025 . Knight Frank predicts continued strong activity , bolstered by operational resilience and increased competition for hotel acquisitions . With some traditional lenders extending their loan books for the sector this year , the increased availability of debt should further support investment activity .
REAL ESTATE TRENDS According to Cushman & Wakefield ’ s inaugural ‘ Visions ’ report , the U . K . remains Europe ’ s top destination for real estate investment , particularly in healthcare , hospitality and retail sectors . Despite a decline in transactional activity over the past two years , areas like offices , experiential leisure and sustainability have shown significant growth .
London ’ s office market remains globally dominant , with total returns reaching 1.5 % by Q3 2024 — the highest
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in two years . Demand for highquality office spaces pushed rental prices higher , with new or extensively refurbished assets accounting for 68 % of leasing activity . Prime rents in central London are forecasted to rise by 4.4 % annually through 2028 , with the top 10 % of rents expected to climb 7.6 % per year .
The experiential leisure market experienced a 250 % growth in investments from 2018-2019 to 2022-2023 , reaching £ 225 million . Revenue from live sports , music and hotels surged , with hotel accommodation spending alone rising 250 % from 2023 to 2024 .
NET ZERO COMMITMENTS The U . K .’ s commitment to achieving net-zero emissions by 2050 is reshaping the real estate landscape . Sustainable real estate investment is on the rise , with ESG-focused funds growing significantly . Cushman & Wakefield ’ s report highlighted that funds targeting ESG improvements accounted for 23 % of total investments in 2023 , up from 3 % between 2015-2020 . However , meeting new energy efficiency standards could cost an estimated £ 71 billion , presenting challenges and opportunities for investors .
AI & TECHNOLOGY The increasing adoption of AI and technology is transforming the U . K . real estate market . Automated
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Valuation Models ( AVMs ) and enhanced data access are streamlining decisionmaking , while the demand for data centers is rising . These advancements are expected to influence investment strategies significantly .
OPTIMISM FOR 2025 Optimism abounds for the U . K . real estate and hospitality sectors as they head into 2025 . With the economy transitioning from inflation to growth , Cushman & Wakefield ’ s head of research and insight Daryl Perry emphasizes that “ key policy developments , ESG advancements , technological innovations and consumer recovery will drive favorable conditions for investors .”
A study by Deloitte revealed 72 % of hospitality executives are optimistic about the market ’ s long-term future , with 70 % anticipating heightened competition for hotel deals in the coming year . Most hotel industry executives expect managing cash flow to be the top priority over the next 12 months , the Deloitte study revealed . The new year is expected to see a surge in M & A activity .
The U . K .’ s adaptability to ongoing structural changes , including decarbonization and AI adoption , positions it as a resilient and lucrative market for global investors . As confidence in the market builds , 2025 is set to be a year of opportunities and growth across various segments .
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