financeBoutique Hotel News··1 min·For: Investor, Owner, Revenue
UK Hotel Investors Pivot to Conversions and Value-Add Deals
Rising construction costs and compressed margins are driving UK hospitality investors toward office conversions, heritage refurbishments, and hybrid residential models. Lenders like OakNorth are adapting underwriting criteria to fund value-add projects and capitalize on distressed commercial assets.
Key Takeaways
- 1High construction costs make ground-up builds less attractive, pushing capital to heritage refurbishments and office-to-hotel conversions.
- 2OakNorth Bank reports hospitality represents £4B of its £17B portfolio, with heavy focus on value-add financing.
- 3Operators are expanding keys by repurposing underutilized meeting spaces and shifting into flexible 'hotelised living' assets.
Source: Boutique Hotel News
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