Overseas interest in hotels

Mark Chambers
Mark Chambers
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Overseas buyers are targeting the North West hotels market as rising prices in London encourage them to look for investments further afield.

Investors from Asia, Russia and Europe, as well as US hedge funds, are all on the lookout for hotel businesses, according to speakers at an event organised by business development organisation Pro-Manchester and the insolvency trade body R3.

Mark Chambers whose Lancashire-based company Onecall Hospitality manages 45 hotels throughout the UK on behalf of banks and investors, said he was advising buyers from Dubai, Bangladesh, Russia and Germany.

He said: “They either cannot find what they are looking for in London or they are fed up paying high prices.

“Initially, they look to cities like Manchester and Liverpool because they are familiar with them, but they are open to a broad range of opportunities outside of the cities.”

Phil Duffy, Managing Director of the Manchester office of Duff & Phelps, said US hedge funds such as Lone Star and Cerberus, which had gained a foothold in the sector by buying groups in need of restructuring, were now looking for other investments. They are keen to buy small to medium sized hotel groups – either solvent or insolvent – to add to their existing portfolios,” he added. Kate Deakin of surveyors Christie + Co said hotel values in 2014 were up by 17 per cent on the previous year.

She said: “The market has come back to life, with confidence returning and trading performance strengthened.”

Richard Wolff, North West chairman of R3 and head of corporate recovery at JMW Solicitors, said: “The hotel industry was one of the worst affected during the downturn.

However, according to R3’s figures, now only 18 per cent of hotels in the North West are considered at heightened risk of failure, one of the lowest risk scores of any sector.”