Investment activity in the Scottish hotels market in the first quarter of 2018 totalled £105.85 million – an increase of 90.3 per cent year-on-year and exceeding the five-year average by 63.1 per cent, according to research by Savills.
The latest high profile deal in what is a buoyant sector is the sale of the Roxburghe Hotel and Golf Course, near Kelso in the Scottish Borders, to 12.18. Investment Management.
The property had been marketed by Savills for offers in excess of £3.25 million on behalf of Roxburghe Estates.
The buyer, a Düsseldorf-based project developer and hotel operator, plans to reopen the hotel and golf course in 2019 following a £30m refurbishment programme to operate as Schloss Roxburghe.
This will mark the first UK purchase for 12.18.
Steven Fyfe, associate director of hotels, for Savills says the sale was high profile, for many reasons.
He says: “It wasn’t just the size of the hotel and the land, which measures 292 acres, but the fact that the vendor was the Duke of Roxburghe added interest, as well as the stunning building plus the excellent reputation of the golf course.”
The 19th century property comprises 22 rooms, a restaurant and bar that 12.18. aims to enhance with the addition of a separate extension to feature 57 additional rooms as well as a luxurious spa and a state-of-the-art meeting space.
The Duke of Roxburghe said: “The plans which the new owners have for major investment in the Roxburghe are very exciting indeed.
“We wish 12.18. every success with the new development and the operation in future and I have no doubt that it will become one of the most outstanding resort destinations in Scotland.
“I would like to pay particular thanks to all the staff who have worked with great dedication to deliver exceptional standards of service to our guests over the years.”
In addition to the hotel, 60 lodges will be built on the surrounding estate and will be made available for sale to private investors through a sale-and lease-back concept that will allow Schloss Roxburghe to extend its room inventory further.
Fyfe says: “The lodge development planning consent also gave it a really good angle and there were national operators looking at it from that point of view.”
After an off-market approach stalled, the property was launched on to the open market at the beginning of September and was under offer within three months.
Fyfe added: “It was important we secured a buyer who could invest in the future of the hotel and golf course while respecting and maintaining the Roxburghe’s heritage, as one of Scotland’s most charming country house hotels.”
In the context of Scottish hotels he says that this is significant sale, but by no means at the top end of the market.
Edinburgh’s Caledonian Hotel, run under the Waldorf Astoria brand, has recently been sold to Abu Dhabi- based Twenty14 Holdings for £85m.
Fyfe says that the research shows buoyancy in the hotel sector. “There was £200m in transactions last year versus £120m the year before, and already in 2018 we have seen over £100m change hands.
“Post Brexit there was a boost to the interest from buyers from other countries but I think the initial boost has died down and now it is principally dependent on the appetite for quality assets.”