Hotel chain moves into Scotland
Five hotels sold as low pound drives demand
Global chain MGM Muthu Hotels, which already has a strong foothold in the UK, has moved into the Scottish market, with the acquisition of five hotels.
Colliers International, which handled the deals, said the low value of sterling was stimulating increased demand for provincial hotels from foreign buyers.
The largest of the deals sees Ian Cleaver’s Highland Heritage sold for more than the £4.5 million asking price, to Singapore-headquartered MGM Muthu Group.
The deal follows the sale of the 63-bedroom Newton Hotel in Nairn, made famous through visits by Charlie Chaplin. It was sold on behalf of a London-based corporate owner which was seeking to rationalise its portfolio, for about £4m.
Alistair Letham, the Scottish Director in the UK hotels agency team at Colliers, said: “These two sales to a rapidly expanding international operator are a great outcome for everyone involved.”
The Highland Heritage sale includes the Royal, the Ben Doran, the Dalmally and the Alexandra.
Julian Troup, head of UK Hotels agency at Colliers, said: “Considerable interest was expressed for the business and assets, which follows a pattern of increasing demand for UK provincial hotels.
“We are seeing an emerging trend of increased demand for quality provincial hotel opportunities from a diverse buyer set.”
He said these included international investors, who have been attracted by weaker sterling and improving trading prospects. Private buyers were being attracted to the benefits of a “lifestyle opportunity” to corporate investors attracted to favourable returns and real estate alternatives.
“Since the beginning of 2016, over 15 per cent of UK hotel sales completed by Colliers were to international buyers,” said Mr Troup.
MGM Muthu Hotels has 27 hotels in its portfolio.
The Highland Heritage sale did not include Kilchurn Castle, the 15th century redoubt of the Clan Cambell on the banks of Loch Awe, which is owned by Mr Cleaver and had been offered for sale alongside his hospitality business. It is currently managed by Historic Scotland.