GVA, the UK’s largest independent commercial property consultant, has presented its latest research on the future of London’s hotel sector at the International Hotel Investment Forum (IHIF) in Berlin this week.
Entitled ‘The changing outlook for hotels in London’, GVA’s research reveals how the sector has performed, its future outlook in a changing market, London’s planned pipeline against the prospects of delivery, and which areas present the greatest opportunity for the sector.
Ian Thompson, director, on Valuation
“Whilst London is a major international city, we don’t envisage overseas investment capital significantly looking outside of the core London hotel areas of Kensington/Knightsbridge through to the City of London and Canary Wharf.
“Therefore, hotel growth in the emerging London markets is likely to be initially driven by investment through UK domiciled entities. Overseas investors are likely to be the follow-on purchaser, such as the recent acquisition of hotels at Westfield’s Stratford shopping centre by an overseas buyer.”
James Williamson, director, on Investment
“A promising outlook especially for the City and Tower Hamlets which presents interesting due diligence and development monitoring opportunities. The key, as ever, will be access to finance.
“Given the relative lack of investment transactions in the current market, it is difficult to assess the spread of investment yields within those areas which have been opened up by new development. The West End and Knightsbridge will continue to attract the overseas trophy buyers paying sub 5% yields for prime freehold and long leasehold hotel real estate opportunities. Investment yields paid in the outlying developing areas will reflect future trading risk and longer term investor demand.”
Andrew Dobson on Building consultancy
“Our research has identified the recent and possible future geographical shifts in sites for hotel development away from traditional ones. This will heighten the need for feasibility studies with a higher standard of locational, market and product evaluation at the development or repositioning stage.”
Max Gaunt on Business Consultancy
“Our research ‘The changing outlook for hotels in London’ illustrates the importance of supporting your planning application with robust evidence of demand as new hotel development proposals may be seeking sites close to emerging transport hubs that have been designated for alternative uses as the London Plan seeks to push a proportion of hotel investment to more peripheral locations.
“The eastward shift of hotel investment identified in our research illustrates the importance of supporting your planning application with a clear statement of economic impact and community benefit, as planning authorities in these areas will be looking to maximise the regeneration potential of new hotel investment proposals.”
GVA profile
GVA is the UK’s largest independent commercial property consultant. Headquartered in London and with 12 offices and 700 fee earners across the UK, GVA offers the country’s largest and most diverse multidisciplinary property consultancy outside of the capital. The company is 80% consultancy-based.
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