Single-asset transactions have dominated the UK hotel investment market in the first half of 2025, while overall transaction volumes are down on last year at nearly £1.6B, according to Savills.

The lower deal volumes follow a bumper period for portfolio transactions in early 2024, but single-asset transactions totalled £1.35B in the first half of 2025, marking an 8.4% year-on-year increase and standing 1.7% above the 10-year H1 average of £1.33B.

Savills said this marked a shift in investor focus and increased confidence in individual hotel assets.

The largest single-asset transaction during the period was Nuveen Real Estate’s sale of the W Edinburgh to Schroders Capital for more than £100M, the largest single-asset hotel deal ever recorded in the Scottish capital. RE Capital's £48M sale of the Ruby Stella Hotel in Midtown in London to LaSalle Investment Management was another significant transaction during the period.

The largest portfolio deal in H1 was Alchemy Partners' acquisition of a stake in luxury UK hotel and spa group Barons Eden, advised by Savills. Another major portfolio transaction was Tristan Capital Partners’ purchase of easyHotel’s €400M portfolio, a multicountry platform that included several UK assets.

In its forecast for the remainder of the year, Savills projects that if all currently marketed assets, totalling approximately £6B in known portfolios and larger single assets, complete this year, the market is poised to exceed the UK 10-year annual average of £4.85B.

In regional markets, the south-west of England recorded £147M in transactions, a 95% increase compared with all of 2024, while the West Midlands saw volumes at £153M, up 60% over the same period, highlighting a renewed interest in hotel investment outside of London and the south-east, Savills said.

“While fewer portfolio deals in the first half have weighed on year-on-year volumes, the robust pipeline of assets on the market suggests we will see a more active second half,” Savills Director of Hotel Capital Markets Richard Dawes said in a statement. “With just over £6B of known live opportunities, the UK hotel sector remains well positioned to deliver a strong full year performance.”