Kenneth Hatton , managing director , head of hotels , Europe at CBRE
Sweden ’ s Pandox picked up the Queens Hotel in Leeds in February .
IF YOU LOOK AT THE DEALS THAT HAVE BEEN DONE , THEY ’ VE BEEN DONE BY FOLKS WHO ARE TAKING A LONGER-TERM VIEW ; THEY ARE LONG-TERM STRATEGIC INVESTORS
– KENNETH HATTON
activity and mean lower yields in the first half of the year , some level of recovery is expected later in the year . “ Wherever you are , it all looks like it ’ s coming back down into more manageable territory , which means that base rates and , therefore , the cost of debt are expected to come down ,” said Hatton . He predicted the “ simpler ” deals are the ones that will make it over the line in 2023 .
“ If you look at the deals that have been done , they ’ ve been done by folks who are taking a longer-term view ; they are longterm strategic investors ,” he said . “ They know there will be financing out there at a certain point in time that will be much more accretive to their deal than doing it right now . We expect those types of investors to continue to be there , but also there will be increasing interest from the rest of the investors as debt costs stabilize .”
Examples of recent activity by such investors in the UK have been Israelbased Fattal Group ’ s expansion into the luxury market through its acquisition of the 280-room Dilly hotel in London last year , estimated at around £ 80- £ 100 ($ 99- $ 124 ) million . More recently , the group acquired the 201-room Grand Brighton for a reported £ 60 ($ 74 ) million .
Meanwhile , Sweden ’ s Pandox bought the 232-room Queens Hotel in Leeds for £ 53 ($ 66 ) million in February and Jastar Capital snapped up London aparthotel Native Bankside earlier this year for more than £ 40 ($ 49 ) million .
May 2023 hotelsmag . com 25