East London set for hotel room boom
London, known as a ‘world in one city’, remains one of the most sought-after and popular tourism destinations on earth attracting over 26 million visitors each year from across the globe. And with growth at 5% per annum (International Passenger Survey Q1 2010) and over 500,000 extra visitors expected in 2012 due to the Summer Olympic and Paralympic Games, the outlook for London’s tourism industry and confidence in London’s hotel market, especially in the East of the city, is sky high.
PricewaterhouseCoopers’ (PwC) report on the Capital’s hotel market recently highlighted that London was the best performing city in Europe last year. In July 2011, hotel occupancy levels reached 92% according to PwC while demand is expected to outstrip supply next year particularly in Q3 2012 thanks to a combination of tourist attracting events including the Olympic Games and the Queen’s Diamond Jubilee celebrations. In fact, as demand soars PwC estimates that London’s average room rate in Q3 2012 could reach £183 resulting in a growth increase of 36% for average room rates.
Ray Withers, Director of property investment expert’s Property Frontiers comments,
“The hotel market in London this year has been forecasted at near double digit growth while 2012 is expected to be a record breaking year for the hotel market. The London Plan, a guidance strategy for London formulated by the Mayor has incorporated an objective to provide an additional 50,000 hotel rooms between 2006 and 2026 while between 2010 and this year alone, over 5,000 new rooms have opened or re-opened in response to growing demand for accommodation.”
Indeed as demand sky rockets numerous hotel brands including Holiday Inn and Express have been popping up around the city, particularly in east London, fuelled not only by the new Olympic Park but also but the creation of new Special Enterprise Zones including the Royal Albert Dock, launch of Westfield shopping centre in Stratford and expansion of ExCel exhibition centre and London City Airport.
With tourists spending in excess of £9.3 billion a year in the city and a predicted increase in visitor numbers, new hotels in the east of London are a welcome addition with a very rare opportunity having emerged for investors to grab a piece of the action.
Withers explains,
“Affording an enhanced hotel experience, we at Property Frontiers are allowing investors from all over the world a rare opportunity to purchase an asset class seldom accessible to individuals. Holiday Inn Express, which is one of the seven brands of the world´s largest hotel company, Intercontinental Hotels Group Plc, located at the prime location of the Royal Albert Dock affords a first-class reputation and with three people checking into a Holiday Inn Express every second, investors will have the opportunity to gain affordable entry into the highly sought after, lucrative London market. Also, many investors have been previously put off investing in Hotel rooms due to the lack of a viable exit strategy but with this particular development there is a buyback plan at the end of the investment term.”
Priced at 22% below independent RICS valuations and with VAT paid by the developer, saving investors a considerable £25,000, Holiday Inn Express, Royal Albert Dock welcomes buyers from all over the world with 50% non-status finance upon completion available.
Set over four floors and consisting of two buildings with 204 en suite rooms, investors can purchase a hotel room on a 199 year leasehold for £125,000 and along with an established Holiday Inn Express brand, investors can enjoy a projected 10.5% net income by year 5 as well as a defined exit strategy.
For more information on investing in this lucrative market please contact the experts Property Frontiers today on +44 (0) 1865 202 700 or visit www.propertyfrontiers.com.