There are significant opportunities for real estate investment in London's hotel market this year, one expert has claimed. Ray Withers, director of Property Frontiers, explained the Olympic Games and other sporting events like Wimbledon will help boost consumer spending in the UK's capital city this year, which will have a knock-on effect for hoteliers. He stated the hotel market in London has been forecast to experience "near double-digit growth" over the course of the next 12 months. Mr Withers added: "2012 is expected to be a record-breaking year for the capital with over 5,000 new rooms opened or reopened in response to growing demand for accommodation from the summer Olympic Games and the Queen's diamond jubilee celebrations."
Last month, Barclays Corporate predicted the recovery witnessed in London's hotel market during 2011 would continue into 2012, with the third quarter of this year set to be key for the overall performance of the sector. The firm noted strong revenue per available room (revPAR) growth has been the driving force behind the capital's hotel sector, with higher room rates contributing to the increase in revPAR. However, hospitality leader at PricewaterhouseCoopers Robert Milburn cautioned a worsening economic picture could negatively impact on hoteliers. He noted the Office for Business Responsibility has halved its estimation of gross domestic product (GDP) growth in the UK for 2012, commenting: "We expect significantly lower revPAR growth as a result."
Meanwhile, London director of HVS Tim Smith recently stated obtaining finance would be key for those hoping to invest in the capital's hotel market. He said "now is a good time for hotel buyers to acquire assets", noting that those who are able to make purchases with cash may be able to convince sellers to take a lower offer, because buyers who need to raise debt finance may find it is not easily accessible.
- Thursday 26 January 2012