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Hotel Values Outperform Office Five Years Running

LONDON-Hotel values across central London outperform offices and even residential property according to new research by property adviser FPDSavills.

By Charlie Jacoby | Updated on February 07, 2002

LONDON-FPDSavills claims that the value of hotel buildings grew by 123% between March 1997 and September 2001. This rate of capital growth, averaging 19.5% per annum, outstrips that seen in both central London offices and residential property.

FPDSavills believes that the hotel sector has benefited from London’s status as a world city and growth has been driven largely by the health of the global economy, rather than local influences. London’s hotels depend on world trade and business as well as the number of tourist visitors.

However Yolande Barnes, head of research at FPDSavills, aired a note of caution. ‘The rate of value growth slowed dramatically between March and September 2001,’ she said. ‘ We think that values fell in the final quarter of 2001 and we expect our index to register a fall of around 5% before the next survey in March. The signs are that business hotels with a stronger UK base of visitors will hold up better than buildings in locations more dependent on tourist trade.’

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