The Scottish hotel market saw investment rise 90.3 percent year-on-year to £105.85 million in the first quarter of 2018. The total investment surpassed the country's five-year average by 63.1 percent, according to a report from Savills.
The most recent investment deal that contributed to this uptick in activity was the sale of the Roxburghe Hotel and Golf Course in the Scottish Borders to Düsseldorf-based project developer and hotel operator 12.18 Investment Management. Savills marketed the property on Roxburghe Estates' behalf for offers more than £3.25 million.
“It wasn’t just the size of the hotel and the land, which measures 292 acres, but the fact that the vendor was the Duke of Roxburghe added interest, as well as the stunning building plus the excellent reputation of the golf course," Steven Fyfe, associate director of hotels, Savills, said in a statement.
The buyer planned to spend £30 million to renovate and rebrand the property, which is 12.18 Investment's first acquisition in the UK. The 22-room hotel is set to reopen as the Schloss Roxburghe in 2019. As part of the refurbishment, 12.18 will extend the building to add 57 new guestrooms, a spa and a meeting facility. The developer will also construct 60 new lodges on the site available for sale to private investors through sale-and-lease-back deals.
Waldorf Astoria's Caledonian Hotel in Edinburgh also sold in Q1 2018 to Abu-Dhabi's Twenty14 Holdings in a £85-million deal, also contributing to the increase in investment activity and a strong start to the year.
“There was £200 million in transactions last year versus £120 million the year before, and already in 2018 we have seen over £100 million change hands. Post Brexit there was a boost to the interest from buyers from other countries but I think the initial boost has died down and now it is principally dependent on the appetite for quality assets," Fyfe said in a statement.