Developing value

George Sell By George Sell
Uploaded 06 March 2019

• Staycity's acquisition of a development company is an interesting twist on the Opco Propco equation.

The rapidly growing Dublin-based operator has already undertaken the role of developer for the recently announced dual branded Wilde/Premier Inn project in London's Paddington, and now it is planning to develop up to 20 per cent of its properties in-house.

The major hotel companies have been in such a rush to become asset-light or even asset-free operations I have often wondered why they didn't see the appeal of retaining certain trophy assets in choice locations such as London - although sitting on the balance sheet they are unlikely to decrease in value.

The serviced apartment space, with some notable exceptions such as Ascott, Frasers and, increasingly, Oakwood, has been dominated by operating companies who have always been just that and have never owned any of their inventory. But recently we have seen some changes in the air, with asset owners acquiring operating companies - Mapletree buying Oakwood, and Brookfield's acquisition of SACO being two recent examples.

Staycity's move in to development shows that in the right situations, being more than a pure operator has its advantages, and it will be intriguing to see which projects it gets involved with as a developer.

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