The UK is considered one of the most liquid markets in Europe, attracting global investors to invest in real estate, including hospitality assets.
According to preliminary year-end data, sales volumes are on course to surpass £4 billion, in line with the 10-year average. It is, however, likely to fall below last year’s totals, which reached a five-year high of more than £6 billion, fuelled by portfolio deals that accounted for over 70% of transaction volumes.
Single-asset transactions have dominated deals throughout 2025. Deal activity accelerated in the second half of the year, with larger individual properties trading during the third quarter as several hotels in London changed hands. Hotel transactions in the capital have accounted for nearly half of the total volumes so far.
As the year comes to a close, CoStar takes stock of the biggest deals of 2025.
City Developments Limited, through its wholly-owned subsidiary Copthorne Hotel Holdings, bought the 706-room Holiday Inn London – Kensington High Street from Cola Holdings for £280 million (£397,000 per room).
This acquisition covers a rare freehold site in the Royal Borough of Kensington and Chelsea, one of London’s most prestigious districts. It is expected to generate a running yield of over 6%, providing immediate income while offering long-term redevelopment potential given the scarcity of freehold sites in this location.
According to the press release from the buyer, the hotel consistently outperforms its competitive set, achieving high occupancies of approximately 97%. Including this acquisition, the group now owns over 3,000 hotel rooms in London, with most properties within the same borough.
The 630-room Novotel London West was acquired by Arora Group and Deva Capital for approximately £160 million (£254,000 per room), marking the return of large single-asset deals in London in the third quarter.
The hotel was bought by Ares Management and EQ Group in 2024 as part of the Landsec portfolio, which sold for a total of approximately £420 million, comprising 18 properties. Within this sale, Ares had entered into an agreement with AccorInvest to surrender the leases, as the properties had been subject to long-term leases.
Following their brief ownership, Ares and EQ Group have sold the property to Arora Group, which has been active in expanding its portfolio through acquisitions. The new owners have emphasised that this transaction aligns with their strategic focus, as they commit to expanding across the UK hotel market.
While the sale of the Novotel London West proved to be the biggest hotel transaction in London during the third quarter, momentum in dealmaking continued in the capital with the acquisition of the 192-room Hoxton Southwark hotel.
Yellow Tree Real Estate acquired the hotel for approximately £150 million (£781,000/room), and it continues to be managed by Ennismore. Lifestyle assets, such as the Hoxton, have been high on investors’ agendas, given their robust trading performance and their operating model delivering good levels of profitability.
During the first half of the year, Schroders Capital acquired the long leasehold interest in the W Edinburgh, located in St James Square in Edinburgh, from Nuveen Real Estate for £100 million (£410,000/room), making it the largest single-asset deal outside of London. The transaction involved the sale of the entire shareholder capital of Edinburgh St James Hotel (GP) Ltd. Records of Companies House for Edinburgh St James Hotel LP, through its Aztec Trust holding companies. The 244-room hotel is the first W Hotel in Scotland, which opened in November 2023. The acquisition aligned with the buyer’s strategy of acquiring upper-tier properties to expand its hotel portfolio.