Sales in the Lake District hospitality sector will continue to defy national trends – with more rooms, visitors and high-profile deals forecast for 2018, according to real estate advisors Colliers International.
The specialist hotels team at Colliers predicts that the Lakes will continue to be its most productive region for hospitality transactions in the UK - with more than 30 hotel and hospitality businesses in the region sold in the past two years.
Colliers believes that the main drivers of such sales in 2017 - the weak pound, low interest rates and poorly performing savings accounts, ISAs and pension schemes – will continue to encourage such deals throughout the next 12 months.
And area-specific factors such as the Lake District being awarded World Heritage Site status by Unesco will also attract further domestic and international buyers.
Julian Troup, head of UK Hotels Agency at Colliers, said: “We are supremely confident that the Lake District will continue to be our best performing region for hospitality sales in the UK during 2018.”
He admitted that ongoing uncertainties over the outcome of Brexit negotiations would continue to impact the sector, along with rising inflation and higher labour costs as hospitality workers opt to leave the UK.
“Nationally, commentators are predicting something of a slowdown through 2018 with a gradual easing in the rate of growth.
“UK and global economic factors helped keep the local sector buoyant through 2017 and although we are also sensing a note of caution creeping in as businesses re-position themselves for 2018, we know from long experience that the Lake District is the most resilient visitor destination in the UK.”
The predicted national slowdown is partly because of a steep increase in the number of rooms available – with almost 20,000 expected to come on stream in 2018 increasing supply and impacting prices.
Julian added that increasing demand for UK provincial hotels opportunities was emerging from a diverse range of buyers.
He explained: “Buyers in 2018 will continue to include international investors attracted by weaker sterling, private purchasers enticed by the benefits of a lifestyle opportunity and corporate investors seeking favourable returns and real estate alternatives.
“As long as Brexit negotiations do not impact more negatively on consumer confidence and consequently the UK economy, we anticipate no material changes to the level of UK transactional activity during 2018.”
Julian cited the sale of Borrowdale Gates Hotel, one of the Lake District’s foremost country house hotels, in 2017 as an example of the region’s appeal to international investors.
Acting on behalf or private owners, Colliers sold the property at Grange-in-Borrowdale to Fairtree Hospitality Real Estate Private Equity Fund, the Guernsey investment vehicle managed by international asset management company Fairtree Capital.