Knight Frank UK Hotel & Leisure Property 2018 Spring Market Review

Date: January 2018

Name: Knight Frank UK Hotel & Leisure Property 2018 Spring Market Review

About: UK Hotel sector in 2017 and where it is going in 2018

Cost: Free

Size: 8 page PDF

THPT Comment: Good graph of hotel yields -v- other specialist sectors (student accommodation, care homes and others), Historical hotel yields 2007-2017, hotel supply growth 2017-2020,

Get a Copy: via THPT or direct from KF

Highlight Quotes: 2017 has seen a substantial uplift in investment activity, as strong fundamentals underpinning the sector continue to make hotels an attractive
investment proposition. Key trends for 2017 have included a strong surge in
portfolio activity, portfolio breakups, resulting in larger single assets coming
to market and significant appetite by overseas investors with over £2.5 billion
of investment.

Meanwhile, further shaping the market has been the wide availability
and diverse sources of capital providing senior and mezzanine hotel debt finance,
on a flexible basis with the ability to execute large loans. With an increasing
pool of institutional lenders, we (Julian Evans, Head of healthcare, hotels & leisure) envisage the debt market will remain highly competitive in the year ahead.

A further trend set to continue into 2018, is the growing demand by institutional
investors seeking to invest in long-term, fixed-leased hotel assets, which provide
secure, index-linked cashflows, backed by a strong covenant. The recent acquisition
by LGIM Real Assets (Legal & General) acquiring the newly opened Hampton by
Hilton at Stansted Airport illustrates the current demand in the investment market
for prime, internationally branded, quality assets with significant growth potential.