Sales of hotels in Scotland have seen a significant increase compared to last year, exceeding the long-term average. Investment in Scottish hotels reached £110 million in the third quarter, a significant rise from the previous quarter’s £70 million. This marks a 150% increase from the five-year quarterly average of £44 million.
According to the Scotland Snapshot report by Colliers, hotel investment in Scotland has been performing strongly in 2024. The total investment for the year so far stands at £200 million, which is 18% higher than the corresponding figure from 2023. The report also highlights a growing interest in not only larger hotels in built-up areas but also leisure-based hotels in popular locations.
Some major deals in the quarter include the acquisition of the Caledonian Hotel in Fort William, the Great Western Hotel in Oban, and the Pitlochry Hydro in Perthshire, all purchased by Bespoke Hotels through Christie & Co. Another notable sale was the Pitbauchlie House Hotel in Dunfermline, sold to London-based Smar Hotels by Solley Hotels through Colliers.
Julian Troup, head of Colliers UK hotels agency, emphasized the strong demand for hotel assets in Scotland, attributing it to the appeal of Scotland’s cities and landscapes to investors. The report also mentions that Edinburgh was ranked as the top market in the UK in Colliers’ Hotel Market Index earlier this year, further solidifying Scotland’s position as an attractive location for investment.
Overall investment activity across all asset classes in Scotland reached £380 million in the third quarter, with a year-to-date total of £1.1 billion, consistent with 2023 figures. Cross-border capital has accounted for 28% of all activity by value this year, slightly lower than the previous year.
Oliver Kolodseike, director in the research and economics team at Colliers, highlighted the challenges and opportunities present in the Scottish market, noting fluctuating yields and sector-specific dynamics. He expressed optimism about investor confidence improving as interest rates are expected to decrease further in the next 12 months, leading to an increase in transactional activity.
