Single hotel transactions restoring balance to the UK hotel investment market

However, this year so far has seen a resurgence in single asset deals, a sign of renewed confidence, growing pricing clarity and a shift toward a more stable and balanced market.

What’s happened so far?

In the first half of the year, single asset hotel transactions totalled £1.35 billion, an 8.4% increase on the same period in 2024 and slightly above the 10 year H1 average. This growth reflects a rebalancing of investor priorities. While portfolios offer scale and efficiency, renewed focus on individual hotel assets indicates a more strategic, hands-on approach to investment, underpinned by confidence in the long term fundamentals of the UK hotel sector.

High profile transactions have highlighted this shift. The sale of the W Hotel in Edinburgh for over £100 million marked not only the largest single asset hotel transaction ever recorded in the city but also a broader appetite for core, urban assets with strong branding potential. Similarly, the Ruby Stella in London changed hands for £48 million, another sign that investors are willing to deploy capital for the right product.

Where is the capital coming from?

So far in 2025, we have seen an increasing range of capital interested in the market. While US and European private equity funds remain active, buyer profiles have broadened, with greater involvement from family offices and institutional investors from the Middle East and India. Indian high-net-worth individuals (HNWI) have emerged as particularly active new entrants while Middle Eastern investors continue to show strong appetite for UK hospitality assets, often with a long term view and a preference for prime locations or trophy assets. Meanwhile, improved liquidity in the debt markets has allowed more buyers to re-enter the space, facilitating greater deal flow.

This broader capital base reflects a subtle shift in investor sentiment. After several years marked by caution and deferred decision making due to conflict, Covid-19 and other macroeconomic challenges, the ‘wait and see approach’ seems to be softening, not because risk has disappeared, but because investors feel better equipped to manage it. The volume and variety of transactions are helping to establish clearer benchmarks, making it easier for buyers to underwrite deals with confidence. The perceived risk is being replaced by tangible, transactable opportunities.

Increasing confidence

This growing confidence is visible not only in the capital but also in a variety of asset types. Investors are increasingly drawn to single assets where they can create value through active management, rebranding, or repositioning. The focus is on striking the right balance between leisure and corporate use, tapping into year-round demand, brand opportunity and identifying assets with strong fundamentals that can be improved over time.

Regional strength

So far in 2025 regional markets are thriving, supported by domestic tourism and shifting consumer patterns. In the South West, hotel transactions reached £147 million in the first half of the year, a 95% increase compared to the whole of 2024. The West Midlands recorded £153 million, up 60% over the same period. This suggests that confidence is spreading more evenly across the country, with investors increasingly pursuing opportunities beyond traditional gateway cities.

Looking ahead

We approach the final months of 2025 with cautious optimism. As more single asset deals close, the market will continue to benefit from a growing evidence base and greater pricing transparency. This in turn is expected to unlock further stock, sustain momentum and reinforce the view that single assets are a crucial component in a strong, balanced UK hotel investment market.

Further information

Contact James Greenslade

South West hotel investments increase by 95% in H1 2025 compared to full year 2024