Hospitality yields and investment by sector
Where UK hospitality capital is flowing and what the assets yield, the benchmark a stabilised trade and a refinance are priced against across the sectors we arrange finance for.
Hotels drew the deepest investment and carry the clearest published yield, with prime leased assets at 4.5% to 4.75% net initial yield (Knight Frank, Oct 2025). The operational trades, from pubs and restaurants to holiday and caravan parks, are valued on fair maintainable trade and EBITDA multiples rather than a property net initial yield, so their pricing is read from trade, not a headline yield.
At a glance
- Hotels£5bn (Savills, 2025)
- Aparthotels and serviced apartments£660m (Savills, 2024 to 2025 combined)
- Prime hotel net initial yield4.5% (Knight Frank, Oct 2025)
- As at2025/26
Where hospitality capital is flowing
A read on the depth of the exit market in each hospitality sector: where capital is committing and how liquid a sale or refinance is likely to be.
| Sector | Annual investment volume |
|---|---|
| Hotels | £5bn |
| Aparthotels and serviced apartments | £660m |
What hospitality assets yield
A net initial yield is the stabilised income as a percentage of value, so a sharper yield means a higher value for the same income. Prime leased hotels priced at 4.5% to 4.75% net initial yield, regional 5.25%+ (Knight Frank, Oct 2025), the anchor for a leased hotel or a resort exit. The operational hospitality trades are different: a pub, restaurant, guest house or holiday park is valued on fair maintainable trade and an EBITDA multiple, so its price moves with turnover and margin, not a fixed yield. Christie & Co recorded restaurant sold prices up 9.9% and pubs broadly flat over the year to its 2026 Business Outlook, evidence of how differently the operational trades price.
Sources: Savills (UK Hotel Market 2025 and European Serviced Apartment Report 2026, 2025 to 2026); Knight Frank (Prime Yield Guide (October 2025) and UK Hotel Dashboard Q3 2025, 2025); HotStats (UK hotel trading performance, full-year 2025, 2025); Christie & Co (Business Outlook 2026, 2025 to 2026); CGA and AlixPartners (Hospitality Market Monitor, H1 2025); VisitBritain (Inbound tourism forecast, 2025 to 2026); BDLA (Bridging and Development Lenders Association quarterly data, Q3 to Q4 2025).
Hospitality yields and investment by sector: common questions
What yield do UK hotels trade at?
Prime London leased hotels traded near 4.5% to 4.75% net initial yield, with regional 5.25%+ (Knight Frank, Oct 2025). Operational hospitality businesses are valued on fair maintainable trade and EBITDA multiples rather than a net initial yield.
How are pubs and restaurants valued if not on a yield?
On a going-concern basis: a valuer assesses the fair maintainable trade a reasonably efficient operator would achieve, applies an EBITDA multiple, and cross-checks against comparable sales. That is why trade, not a headline yield, drives the price and the loan.
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