What Does Increased Chinese Investment Mean For UK Hotels?

An increasing number of Chinese investors have been targeting real estate markets overseas, with hotels among the sectors that this demographic is interested in. According to head of hotels at Christie + Co Jeremy Hill, this can only benefit the industry....

An increasing number of Chinese investors have been targeting real estate markets overseas, with hotels among the sectors that this demographic is interested in. According to head of hotels at Christie + Co Jeremy Hill, this can only benefit the industry. "In general terms, any new investment, from whichever source, has to be good news for the UK hotel marketplace. This is especially the case if today's investor demand for UK hotels is matched by a desire to really invest in the business," he stated.

Mr Hill added that investors who are prepared to maintain capital expenditure in their hotel assets will be the ones who reap the rewards when demand for such accommodation fully recovers. He noted that one of the reasons behind the buoyancy of the country's hotel sector is the perception by international investors - including the Chinese - that London is something of a safe haven in difficult economic times.

The most recent IPD/IPF/PDIG UK Q3 2011 Quarterly Briefing revealed that investment in the hotel industry is going strong. Investors are targeting leisure assets, such as hotels, in an attempt to diversify their portfolios, the report asserted; adding that properties grouped into the "other" category - which includes student accommodation and healthcare properties, as well as hotels and leisure assets - is now bigger than both the City and regional office segments. In the past 12 months, investment volumes in assets classed as "other" have increased by 21.3 per cent.

Investors who plough their money into the hotel market are likely to be watching very carefully next year, with the 2012 Olympic Games in London expected to provide a significant boost to the industry. In its forecast for next year, PricewaterhouseCoopers highlighted the importance of the sporting event in delivering another strong year. Head of hospitality and leisure research at the firm Liz Hall pointed out that the wave of investment in new hotels in the city was necessary. "London needed an injection of stylish new products and this has strengthened the capital's appeal," she commented.
 

- Wednesday 09 November 2011

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