UK serviced apartment sector to expand by 13.1% in 2018
The serviced apartment sector is set for record growth with more than 2,600 units scheduled to open in 2017, according to a report from property company Savills.
Expansion forecast for the year will be led by the regions with a growth of 20.5%, compared to London which will see a more muted 8.1% increase. Overall, the sector will expand by 13.1%, exceeding the 10 year average of 6%.
The UK Extended Stay Market report highlighted the challenging year experienced by serviced apartment operators during 2016, with revenue per available per room down by 1.7% in London, although it increased by 1.2% outside the capital.
Looking at performance within the extended stay sector during 2017, Savills said the softening of corporate business following the referendum vote is likely to be offset by the weaker pound. Meanwhile, leisure business is expected to be more buoyant.
Regarding the record levels of new development in the regional cities, “the question is whether they will be able to absorb this new stock without denting operational performance”, said the report.
James Foice, chief executive of the Association of Serviced Apartment Providers, said: “It’s fantastic to see such strong confidence in our serviced apartment sector with so many significant new openings by our members this year including a number of sizeable aparthotels. And it’s especially good to see that the expansion is happening in key cities right across the UK including Manchester, Edinburgh and London, as the consumer demand for serviced apartments continues to increase.”