This is the UK's second-biggest city for hotel investment

Stefan King's G1 Group bought the Scotsman Hotel in Edinburgh last year. Photo credit: The Scotsman Hotel

Investment in Scotland's hotel sector jumped 60 percent last year, reaching £195 million across all of the country's cities. 

Edinburgh accounted for 64 percent of these deals at more than £117 million, outpacing both Birmingham and Liverpool to become the second-largest target city in the UK outside of London. Glasgow's hotel investment more than doubled to reach £35.8 million, while Dundee and Aberdeen both saw “encouraging” year-on-year investment increases to £5.5 million and £5.7 million respectively.

“2017 marked a year whereby the operational and investor sentiment of hotels were both at strong points in the cycle,” Savills associate Steven Fyfe said in a statement. “The momentum has continued and Q1 2018 looks set to deliver in excess of £110m in transactions in a period that is usually notoriously quiet. The improved performance is expected to offset the 9 percent increase in supply anticipated throughout 2018.”

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According to Savills, overseas investors dominated 2017 transaction volumes in terms of buyer type, totaling £57.4 million—more than 7 times larger than the level of investment by international buyers the year prior (£7.8 million). U.S.-based investors took the lion’s share of activity, followed by those from Singapore, India and Hong Kong.

Major deals in 2017 included the sale of Edinburgh's Scotsman Hotel to Stefan King's G1 Group, and the £33.3-million deal for the Premier Inn St Enoch Square in Glasgow.