01 / Introduction 

London’s status as one of the world’s most visited cities has continued to drive a strong hotel market, attracting investor interest in the sector both domestically and from overseas. Deteriorating office stocks and London’s focus on the retention and reuse of existing structures have increased the popularity of office-to-hotel conversion schemes. 

The market for hotels

CBRE’s latest European Hotels Destination Index identified London as the most investible hotel market in Europe, with its unmatched scale and demand. UK hotel investment volumes are estimated to have reached £5bn in 2025, an increase of almost 8% when compared against the 10-year average, with London accounting for £3bn of this investment. It has seen a 25% year‑on-year increase in hotel investment, surpassing other core UK cities such as Edinburgh, Manchester, Birmingham and Oxford, although new supply coming to market in London is lower than European counterparts despite steady demand. 

The need to reuse

Increasingly flexible working arrangements and an occupier focus on quality and sustainability attributes have reduced the demand for some types of office space. In parts of London, this has pushed the office vacancy rate to 6.8%, with a substantial portion of this secondhand space. 

When returned to the market, older offices often require substantial upgrades to meet increased energy efficiency standards and tenant requirements for flexibility and amenity space. In some cases, financial pressures, strained viability and uncertainty of demand have encouraged owners to explore new uses for these often very conveniently situated buildings. The conversion of existing commercial buildings to hotel use can present an attractive opportunity to repurpose underperforming assets. 

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