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MENA investors dominate UK hospitality market in 2020

Article-MENA investors dominate UK hospitality market in 2020

Waldorf Hotel
Despite ongoing global market volatility, MENA investors continue to look at the UK’s hotel market.

Despite investment activity being dampened by the global pandemic, MENA investors continue to drive investment into UK’s hospitality sector, transacting on over GBP 1.25 billion of central London trophy hotel assets in 2020, according to real estate advisor Savills.


Driven by investors from Qatar and Israel, the overall UK transaction volumes reached GBP 2.3 billion in 2020, a decrease in 2019 volumes and the ten-year average, with key 2020 deals including the sales of The Ritz, Grosvenor House Suites and Sanderson & St Martins Lane hotels.

Historically, the UK hospitality market represented a safe haven for MENA investors, however with the economic disruption, travel restrictions, and temporary hotel closures, investment was curtailed. However, Qatari, Israeli, US, Singaporean, Thai and European investors accounted for 63% of total UK hotel investment.

Earlier last year, just before countries across the world entered a lockdown, Qatari investor purchased the iconic London Ritz for a reported GBP 800 million. London’s hospitality market remains a bright spot for MENA investors. Qatar Investment Authority already owns Harrods and Canary Wharf, while Qatari Diar owns London’s Olympic village.


Although, despite the short-term volatility in the hospitality sector, real estate advisory Knight Frank, maintains that the long-term fundamentals remain strong for the UK’s hotel sector.

“Similar to previous downturns, the UK hotel industry will adapt and survive. Not being a homogeneous sector and diversifying through investment in a varied portfolio is only set to increase in a post pandemic world. From the price-point and strong brand recognition of the budget sector, to the proven resilience of the serviced apartment sector, wide variation exists.

Furthermore, with the pandemic driving a flight to quality, leveraging well-established branding and future proofing hotels in strategic locations, can offer unique upside potential for investors,” says the advisory, following its Knight Frank’s Hotel Transaction Trends 2021,

Savills are equally optimistic; the advisory maintains that the UK continues to be attractive despite the economic downturn brought on by the pandemic.

“On the whole, UK real estate continues to be an attractive investment asset class given the relatively weak strength of the pound against other currencies, coupled with the widening spread between Gilts and equivalent yields,” said Rob Stapleton, Director, Savills Hotel Capital Markets in a recent blog post on the advisory’s website.

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