Investment in serviced apartments in the US totalled £1.3bn compared with only £123.5m in the UK.
According to the latest UK serviced apartment report from Savills, the dearth of standalone blocks with the appropriate consent in the UK means that investment activity remains highly constrained.
Savills said that significant development expansion over the next five years could mean that serviced apartment investment volumes increased in line with that seen in the US, where it accounts for 12% of hotel volumes.
Supply in the key regional cities, in units per 1,000 business visitors, is more constrained – Birmingham has the lowest relative supply of 0.6 units. However, further growth would need to be approached cautiously owing to the shorter lengths of stays typical of business visitors outside the capital.
Savills notes that growth in revenue per available apartment hit 16% this year, far exceeding that seen in the hotel market, where RevPAR growth has averaged 4.1% over the same period. Occupancy also improved over the first half of 2013 with Q2 occupancy up by 1.3 percentage points year-on-year and rates up by 3.6% over the same period.
annabel.dixon@estatesgazette.com
