UK: Savills’ UK Serviced Apartment Report 2013 forecasts a “significant expansion in the sector over the next five years”.
The report says investment in the sector could potentially
triple by 2018 and that 2013 is the year that serviced apartments
have become a "recognised sector" in the UK.
When compared with the US, the level of investment in UK serviced apartments as opposed to hotels has significant potential for growth. Investment in US serviced apartments has totalled £1.3 billion so far this year, equivalent to 12 per cent of total US hotel sales. This compares with investment of £123.5 million in the UK, just five per cent of total UK hotel sales.
Tim Stoyle, head of hotel valuations at Savills, said: "The US is a bigger market so like-for-like comparisons are difficult, but the dramatic difference in volumes does demonstrate the significant potential for growth in the UK market. New investors to the sector have recognised its investment potential and are committed to expanding purpose-built stock.'
Marie Hickey, associate director of research at Savills, said: "The increasing movement towards C1 (hotel) consent when it comes to expanding stock will help to legitimise the sector and boost future investment. Previous expansion was largely driven by the acquisition of standard residential (C3) units, typically part of larger residential blocks, through leases and or management contracts. In London this has posed a risk to operation as C3 properties cannot be let for periods of less than 90 days."