THE number of hotel deals slowed in the second half of the year as the lack of debt financing continues continued to take its toll on the sector, data published yesterday by Deloitte showed.
UK hotel transactions totalled around £300m in the second half of the year, a significant slowdown on the £1bn reported in the first half and £2.5bn in the same period last year.
“Some recovery in the UK hotel transaction market was apparent in 2011...and this continued into the first months of 2012,” said Nick van Marken, global head of hospitality at Deloitte.
“However, activity slowed in the second half of 2012 – whilst there are a number of transactions in the pipeline, we saw very few get across the line.”
Single asset deals continue to be dominated by London where pricing remains strong, the accountancy firm said. Deals included the acquisition of the luxury Mayfair hotel the Cavendish by Singapore’s Ascott Group for £159m.
Outside the capital, distressed sales dominated the market.
These included the sale of the Glasgow Radisson, which was bought out of administration by Azure Properties; Hyatt Hotels Corporation’s acquisition of the Hyatt Regency in Birmingham and New-York-based KSL Partners’ purchase of the hotel and golf resort the Belfry.
Van Marken said: “There are a number of portfolio and single asset transactions that are currently being marketed. As a result, activity is expected to pick-up.
“That said, difficulties in accessing debt funding and the continued disparity between buyer and seller in terms of price expectation mean disposal processes are likely to continue to be longer and more difficult to complete.