In recent months London has become known as one of the top investments in global commercial property. Undoubtedly, with prices having fallen so hard during the downturn, and the economic recovery so fragile, there are some excellent opportunities for London property investment; chances to buy prime investment property in London at a fraction of its true value. That said, there are probably more duds per square mile in London than in any other city in the world, or at least as many, it is all about knowing what to look for.
London is one of the world's financial centres, but no one has missed that boat. Prime investment properties in London, particularly in the financial district have seen continued price appreciation even during the downturn -- you will struggle to find any office space up for grabs here without paying full whack. We need to find some fresh meat.
The hotel sector is doing incredibly well at the moment, with recent reports putting performance at well above pre-recession levels. According to the HotStats UK Chain Hotels Market Review June 2011 hotels in the capital saw Gross Operating Profit per Available Room (GOPPAR) grow 17.6% to £94.12.
This was the largest growth in GOPPAR in London since September 2010, and was primarily driven by a 15.1% growth in Revenue per Available Room (RevPAR) to £132.05. According to HotStats the 11% year to date growth in 2011, on top of the 12% growth in the first half of 2010 puts London hotel performance well above pre-recession levels; easily recouping the 14.1% decline in profit per room seen in the first half of 2010.
"London hoteliers seem to be infallible at the moment. They have now convincingly shrugged off the recession to hit new heights," said Jonathan Langston, managing director of TRI Hospitality Consulting.
"Whilst the ONS has reported another quarter of limited economic growth in the UK, the growth in revenue and profitability at London hotels has been leveraged by the multi-national origin of both business and leisure visitors to the capital. Added to which, the packed summer season of events in the city continued with accommodation demand derived from major events including Wimbledon, Hard Rock Calling, Taste of London and Royal Ascot," he said.
Like in most cities investment properties in London benefit from the fact that there is little space for new building. In London demand for hotel rooms is set to continue growing, but even at current levels hotels are seeing growth in rates. Now is a chance to buy hotel investments in London, because they are set to see continued appreciation in the coming years.