Private equity investors are ploughing more cash into the short-term letting and serviced apartment industry than they are investing in the hotel market.
This is according to the latest report by commercial property research firm JLL. It found that in the year to May 2018, some £486m was invested in the serviced apartment industry in the UK alone. This is up from just £89m back in 2010, showing how rapidly the demand for this kind of accommodation is growing.
The researchers said that the investment in the industry will outpace investment in hotels. Eva Chan, a researcher at JLL’s Hotels and Hospitality EMEA team explained why serviced apartments are so appealing to investors: “With lower running costs than a staffed hotel, the serviced apartment sector also offers the opportunity to redevelop and to renovate to deliver higher returns.”
She added that portfolios of executive apartments are now attracting a large number of bids when they are sold, suggesting that the industry is increasingly seen as a viable asset class from which to make money.
All this investment is good for the guests who enjoy staying in serviced apartments as quality is likely to continue to improve as a result. There will also be more executive apartments available to choose from in towns and cities across the UK.
