London is in the midst of a property boom and looks set to strengthen further its position as a leading global hotel market.
The capital has enjoyed a strong return since the financial crisis and, with the exception of Paris, is the only European gateway city outperforming its peak pre-crisis RevPAR (revenue per available rooms) levels.
In 2013, London was the most invested city in the world in terms of commercial real estate.
These were just some of the conclusions from an HVS London Update breakfast seminar held recently, attended by 70 hotel operators, analysts and investors.
The event was part of a series of market briefings organised globally by HVS global hospitality services.
HVS Hodges Ward Elliott MD Charles Human said tourism in the capital is likely to be further boosted from increased Chinese demand as an improved visa procedure is implemented for Chinese visitors.
“London has a shortage of hotel stock on the market, which pushes both demand and prices higher. The capital also has a high proportion of poor quality hotels which needs replacing – either as hotels, or residential units,” said Human.
Lending for hotel development had become easier to access with more competition among established lenders, the HVS seminar heard.
As London expands towards the East and the South, HVS says hotel development is shifting towards new areas, particularly those with high corporate and residential growth.
A discussion chaired by HVS Chairman Russell Kett involving senior executives from Starwood Capital, Precis Holdings, citizenM and London & Regional Properties, debated how it was leisure rather than corporate demand that was of more interest to hoteliers, as corporate rates have been relatively static over recent years.
Image of London skyline courtesy of Jason Hawkes
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