Buyers check back into UK hotels

HOTEL deals are running at peak levels as billionaire investors step back into the London market from Europe, America and Asia.

Despite the drop-off in hotel occupancy levels after 9.11, more recent terrorist fears and Sars, buyers' interest in London and British provincial hotels is at a three-year high.

The findings come from estate agent CB Richard Ellis, whose head of hotels group Derek Gammage said: 'Hotels have become flavour of the month - they are dirty great chunks of real estate and have a massive residual value. What other occupier is so incentivised to maintain the building?'

Buyers are tending to come from cash-rich US funds or wealthy Asian and European private investors, with the Irish at the forefront.

Irish property magnate Derek Quinlan last month led a £790m purchase of the Savoy Group, owner of landmark London hotels Claridge's, the Savoy, the Connaught and the Berkeley. He defeated bidders including Saudi Prince Alwaleed Bin Talal.

Meanwhile, Irish hotels and business centres operator Prem, controlled by Paddy Kelly, is a bidder for the 120 Premier Lodge budget hotels being auctioned by pubs group Spirit for £560m or more.

Industry pundits speculate that hotels operator Millennium & Copthorne will eventually be taken private by Kwek Leng Beng, its billionaire Singapore-based chairman and 52% shareholder.