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Interest from Foreign Capital Drives London Hotel Prices to Pre-Crisis Level

According to Jones Lang LaSalle’s UK Hotel Intelligence Report

January 21, 2013 - Whilst hotels in the regions continue to struggle under fragile demand, London hotels have posted robust operating results for 2012 according to Jones Lang LaSalle’s latest UK Hotel Intelligence report.

London trophy hotels continue to attract foreign capital as London remains the main focus of UK investment activity with market stability being reflected in the low yields for hotels acquisitions, typically ranging between 4 and 5 per cent. Investment volumes in London at year end 2012 totalled £1 billion reflecting 56% of total UK investment volumes of £1.8 billion.

Jon Hubbard, CEO Northern Europe for the Hotels & Hospitality Group at Jones Lang LaSalle said: “Despite the economic challenges it faces, the UK remains Europe’s most active hotel investment market and interest remains in key assets in prominent locations. Notable sales in 2012, such as the 4-star Cavendish Hotel which sold for £159 million, have shown that for the right assets in the right location, investors continue to pay high prices.”

Due to London’s international appeal, ownership is very diversified and only 53% of the 4 and 5 star hotel bed stock is owned by UK residents. Asian owners are the second largest group and constitute a market share of 18%, having significantly increased their presence in recent years, with European ownership accounting for 12% of the total. The share of Middle Eastern ownership in the upscale segment is 7%, increasing significantly following a number of notable transactions in 2011.

Jon Hubbard, CEO Northern Europe at Jones Lang LaSalle concluded: “The fundamental strengths of London as a leading business city globally, together with continued growth in leisure tourism, have created stable operating conditions which have made London a magnet for foreign capital and we have witnessed a growing interest from Asian and Middle Eastern investors. These equity rich investors, often HNWI’s or sovereign wealth funds, have focussed predominantly on 4 and 5 star hotels and, supported by growing profitability, have driven prices in the market segment back to pre-crisis levels”

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE: JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse in real estate with $47 billion of assets under management. For further information, please visit


Jones Lang LaSalle 's Hotels & Hospitality Group

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