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Hotels Beat All Other Property Sectors

LONDON-UK hotels have outperformed the FTSE-100 stock index as well as all other commercial property sectors over the past 20 years, according to new research from Andersen.

By Steve Killick | Updated on July 18, 2001

LONDON-Investment in British hotels has comfortably outperformed the FTSE-100 index of top shares and other commercial real estate sectors according to a report released today. The Andersen UK Hotel Investment Study concluded that unleveraged yields of 17% were achieved from a variety of regional UK hotels over a 20-year period compared to 13.7% from the FTSE 100 and 12% in UK property. While investment in offices, factories and warehouses deteriorates over time, hotels tend to appreciate.

Andersen’s Alan Hopper, partner in the firm’s UK Hospitality consulting practice, says the findings explain recent investment in hotels by financial institutions such as Nomura, Royal Bank of Scotland, Norwich Union and Bank of Scotland. Hopper notes: ‘The results of the study indicate that financial institutions recognise the superior returns achievable from investment in hotels compared to other types of property.’

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