A press release from the ASAP reported strong performance growth for the UK serviced apartment sector in 2017. London continues to lead the way, followed by Edinburgh and Manchester. According to STR, UK serviced apartments recorded an occupancy level of 81.7%, while the average daily rate (ADR) rose 5.4% to £148.48.
The full press release reads:
Based on STR’s year-end performance figures, U.K. serviced apartments recorded an actual occupancy level of 81.7%, a 0.2% increase over 2016. Meanwhile, average daily rate (ADR) rose 5.4% to GBP148.48. London accounted for much of the sector’s growth in 2017, posting a 2.2% increase in occupancy to 83.8% and a 9.8% increase in ADR to GBP198.74. Across the rest of the U.K. (U.K. excluding London), serviced apartment occupancy dropped 1.7% to an actual level of 79.7%, while rates rose modestly (+1.0% to GBP93.71).
Performance was mixed across key U.K. cities. Manchester experienced a strong increase in supply over the course of 2017, and saw a 6.3% decline in occupancy. Although the city’s actual occupancy level remained considerably high at 80.5%, ADR dropped 3.4% to GBP100.09, confirming the impact supply growth has had on Manchester’s overall performance. Meanwhile, Edinburgh recorded a 0.4% growth in occupancy to 84.4% and a 7.3% growth in ADR to GBP119.21. Thomas Emanuel, Director of Business Development for STR, comments: “Although results were quite mixed across U.K. markets, it is encouraging to see that overall performance levels in the serviced apartment sector continued to grow in 2017.
Supply growth has been considerable, which confirms the high level of investment interest in further developing this sector, but strong demand growth and the ability of operators to drive rate growth in several markets are positive indicators for how the sector will continue to adapt as its inventory expands.”
James Foice, Chief Executive of the ASAP, comments: “It’s really fantastic to see our serviced apartment sector continuing to perform very strongly in 2017 in spite of the economic uncertainty and the significant increase in supply which proves that the consumer demand for this alternative way to stay continues to grow at a very impressive rate, year on year. We are very excited about the many new developments opening right across the U.K. in 2018 which includes properties in Southampton, Manchester, Edinburgh, Glasgow, London and Brighton which reflects the undaunted confidence in our sector as operators continue to accelerate their expansion plans.”
Note: *Figures quoted from the STR occupancy study for the U.K. serviced apartment sector