Transaction volumes in the UK serviced apartment sector reached £325m in 2015, a 114% uplift on 2014.
According to JLL, during the first quarter of 2016, two deals took place in London, including the 77-bedroom SACO The Cannon and 268-bedroom Staycity Serviced Apartments & Aparthotels London Heathrow, which sold for £32m and £35m respectively.
More than 1,500 rooms are due to open in London between now and 2019. Changing corporate and consumer habits and relative undersupply means that key UK cities also have big potential for growth. Estimates suggest that Manchester has 2.2 serviced apartments per 1,000 overnight international business travellers.
Max Thorne, managing director in JLL’s hotels and hospitality team, said: “Serviced apartments are really starting to be seen as a good investment opportunity because of the high profit margin, stable cash flow, high space efficiency, conversion flexibility and lower development cost. It can also be a solution to the oversupply of residential properties. Improved product awareness and the changing needs of the corporate traveller are also propelling this on to the investor radar. We are also predicting consolidation among operators in the sector over the next 12-24 months.”
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