People live, work and travel differently in the modern era. A property strategy that investors are falling over their feet to be involved with is Serviced accommodation. Are investors chasing a shiny penny? When will the bubble burst?
Serviced apartments: are a fabulous cash flowing business if done correctly, in the right area, knowing the market you want to attract? Who are you wanting to attract? Professionals? Contract Workers? Holiday makers?
In 2017, the global total of serviced apartments hit one million. This shows a 30% increase over six years, with Europe being cited as a key player. Within this, the UK is the market leader, with a growth rate of 13% over two years; there are now a total of 22,000 serviced apartments in the UK and Ireland. London – as a hub for business and tourism – has seen a dramatic rise in the serviced apartment industry: a trend that is set to increase. This is mirrored, albeit to a lesser extent, by other UK cities that are important to tourism: for example, Edinburgh and Manchester both reported strong growth.
The interest that this business-leisure market has generated now spans both consumer awareness and investor confidence, resulting in investment volumes in the UK serviced apartment market growing almost five times over the last eight years, from £89m to £486m.
This spirit of positivity within the investor community, coupled with the consistent growth of the serviced apartment market, spells good news for the future of the industry: it’s set to outperform that of hotels. Investors are gaining from the higher profit margin pertaining to flexible, home-style accommodation, as required by an adapting population.
Serviced Accommodation looks set to stay no doubt local authorities will bring into force so kind of rules and regulations as they have the 90 day rule in London which is currently been rolled out into other cities.
Sheffield’s Buoyant Serviced Accommodation market is ever growing, if you would like to discuss opportunities in Sheffield please do not hesitate to contact the team.