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Scotland hotels ‘drawing Mideast investors’

Dubai, January 30, 2013

Scotland, which has outperformed every other European country when it comes to investment returns in the leased hotel sector, continues to attracts investors from all over the Middle East, said a top official.

"The European hospitality sector has long been an attractive destination for Middle Eastern investors seeking to diversify their portfolios,” said Anne MacColl, chief executive of Scottish Development International.

“While Europe on the whole has continued to deliver stable returns, the research clearly highlights Scotland's outperformance within the sector, providing a unique opportunity for investors to secure significant returns year on year within a flourishing investment portfolio."

Middle East investors in Scotland’s travel and tourism sector include Dubai World who owns the luxurious Turnberry Resort near Glasgow and MBI International who owns the Scotsman Hotel in the very heart of Edinburgh City Centre, said MacColl.

Scottish leased hotel returns are ranked second out of nine European counties, coming second only to the rest of the UK as a whole, said a new research from Scottish Development International and IPD.

This new research is the first of its kind to look at the property investor return performance of leased Scottish hotels, primarily in the budget market.

Between 2009 and 2011, Scottish leased hotels produced total returns of 6.9 per cent year-on-year, compared to Germany which achieved 4.4 per cent and the rest of the UK with 9.5 per cent, and outperforming Austria, Finland, France, Norway and Portugal, the report said.

During 2011, hotels as a real estate asset class demonstrated total returns growth, from 9.2 per cent in 2010 to 9.5 per cent in 2011, the report added.

Other real estate sectors significantly slowed down in the same time period, with total returns for retail and offices falling from 14.7 per cent year-on-year to 6 per cent year-on-year for retail, and from 9 per cent to 1.4 per cent for office.

The hotel sample included in this research included 434 leased real estate properties, valued at 9 billion Euros at the end of 2011.  In Scotland, the sample was valued at GBP138 million ($216.9 million) containing 16 properties at an average value of GBP8.6 million. – TradeArabia News Service

Tags: Middle East | Dubai | investment | Scotland | hospitality sector |

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