Manchester has retained its position as the most attractive hotel investment destination in England outside of London in 2017 according to Deloitte’s annual European Hotel Investment Survey, outperforming Cambridge, Oxford and Bath.
The growth of e-commerce requires the smooth flow of goods and this is spurring changes to the logistics industry, with 45 per cent of current demand coming fromSimon Bedford, partner at Deloitte Real Estate, said:
“Manchester has developed a robust hotel market with strong occupancy levels and a track record of absorbing new supply.”
Increased tourism from overseas due to the weak pound has created an increased demand for hotel accommodation.
Tom Cunningham, hotels director at Savills Manchester, comments:
“Manchester is a truly global city with high levels of recognition thanks to its international airports, forward-thinking city council, strong visitor numbers and numerous sporting, business and leisure events every year. The strength of its hotel investment market is a reflection of this, and we expect 2018 to be another robust year.”
According to Savills, the number of hotel transactions in Manchester has more than doubled year-on-year, with nine deals totalling £178.5m completed in 2017 compared to six deals with a value of £83.1m in 2016. A total of 1,127 individual hotel rooms were sold, a 32% increase on the 854-room total of 2016. At £144,560, the average price per room was 36% higher than the UK average (excluding London) of £106,290.
Overseas investors dominated the market in 2017, accounting for 81.5% of hotel deals. Investment growth was fuelled by particularly strong demand from Asia-Pacific buyers accounting for 49.3%, with Singaporean and US investors’ purchases totalling £91m and £54.5m respectively. Most notable sales were the Holiday Inn Manchester City Centre to US-based Starwood Capital for £54.5m and the £52.5m sale of the Lowry Hotel to Singaporean City Developments Ltd.
Deloitte’s survey shows that investment in the Manchester hotel sector is set to continue its momentum in 2018 as the region delivers key projects. Hotel investors are also optimistic about 2018 growth prospects, with the majority of respondents expecting growth between 1 and 3 per cent. Currently under construction are Roomzzz Manchester Corn Exchange and the 19-storey Crowne Plaza and Staybridge development on Oxford Road, both set to open in early 2018.