Europe -  Edinburgh, United Kingdom

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Edinburgh, with 537,000 inhabitants as of 2020, ranks ahead of Milan, Paris, Amsterdam, Prague, Budapest and Lisbon in the Global Financial Centres Index (GFCI, March 2021). The city also has the highest Gross Value Added (GVA) per capita of any UK city outside London. While the largest private sector in Edinburgh is financial services, employing 35,000 workers and managing over £500 billion of funds, the city also enjoys a good reputation for fintech services, IT and web-based marketing. The city is home to a thriving technology and software sector, including global companies founded in Edinburgh, such as Skyscanner and Fanduel. Many of the employees of these companies are graduates from Edinburgh’s universities. Key infrastructure includes the state-of-the-art Edinburgh International Conference Centre and Edinburgh Airport. Passenger movements at the airport grew at a compound annual growth rate of 5.0% from 2009 to 2019, during which the share of international passengers increased from 45.7% to 63.8%. 2019 was the airport’s busiest year on record, with 14.7 million passengers, a 3.2% increase over 2018. Several new international connections were launched in 2019, including Wizz Air's new routes to Budapest, Bucharest, Warsaw and Gdansk; Ryanair's new routes to Luxembourg and Bucharest; easyJet's new route to Verona; Loganair’s new routes to Bergen and Stavanger; and Lauda’s new route to Vienna.

In 2020, the Edinburgh Festival did not proceed as planned for the first time in 70 years. The festival’s events normally push 100.0% hotel occupancy for a six-week period every year. This and other events, such as Hogmanay (New Year’s Eve), and a strong summer season, have historically contributed to year-long average occupancy of over 80.0% for the last decade and beyond. Average rate growth stagnated in 2018 after seven consecutive years of growth from 2011 to 2017, and further declined by 1.5% in 2019; however, the city still enjoys one of the highest citywide RevPARs in Europe. Overall, Edinburgh’s hotel values recorded a 13.5% decline in 2020, in euro terms (12.5% in pounds sterling). The immediate threat, however, is the heavy pipeline due by 2025, being around 37.0% of the existing supply, assuming all developments are realised.

Six hotel transactions were recorded in 2019 for an aggregate volume of €81.9 million, an average price per key of approximately €150,000 for the 553 rooms. The properties included the 115-keyTravelodge Edinburgh Cameron Toll, the 37-key Princes Street Suites, the 43-key Travelodge Edinburgh Central, the 184-key Hilton Edinburgh Grosvenor, the 73-key Travelodge Haymarket and the 101-key Holiday Inn Edinburgh City West. Purchasers included the likes of Lothbury Investment Management, The Edinburgh Collection, AXA, Cedar Capital Partners, UBS and London & Regional Properties. In 2020, however, no transactional activity was reported. Recovery will be driven by the UK’s attractive macroeconomic environment in the wider European context and its advanced progress in administering vaccinations, as well as strong domestic and leisure demand.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)