Central London Serviced Apartment Market

The Serviced Apartment market in London is enjoying a coming of age. In terms of demand, the Serviced Apartment market has now expanded its profile well beyond its early beginnings in corporate relocation. Serviced Apartments are becoming an increasingly prominent alternative to hotels, particularly for longer stays. They also offer a degree of flexibility and service unavailable in the traditional long term rental market providing further opportunity for growth for the serviced apartment operators.

In Summary

• Demand for serviced apartments has been steadily increasing since 2009.
• Rising demand is fuelled by a growing number of corporates mandating the use of serviced apartments and the growing profile of the sector amongst leisure travellers.
• Serviced apartment rates are up 12% since 2010.
• Corporate demand for serviced apartments is shifting from prime central to less expensive secondary locations in response to the needs to reduce costs.
• Corporate demand is also moving towards smaller unit sizes and shared occupancy.
• Tourist demand for serviced apartments is rapidly increasing as more inventory becomes available through online sales channels.
• The recession brought new property development to a near standstill placing significant pressure on supply.
• Leased apartments are becoming an increasingly cost effective alternative to serviced apartments for clients with continuous demand for housing reducing cost by up to 30%.
• Overall serviced apartments stock in London now exceeds 6,600 units, representing just 6% of hotel supply.