Over the last several months, Britons have been slowly returning to old shopping habits such as eating out in restaurants, travelling and booking hotels, and high street shopping. Demand for housing rocketed over the course of the Covid-19 outbreak, but on top of this, businesses that were initially crumbling under pandemic pressures are now making a comeback in the UK real estate market.
What does this mean for investors? Investment strategies are subjective, and your action plan will depend on factors such as your goals, interests, and time horizon. With this in mind, the emerging trends in the UK property market currently have a lot to offer with a variety of opportunities across hotels, housing developments, apartment builds, commercial property, and residential refurbishment sectors.
Hotel investment opportunities
Despite the collapse of tourism in 2019, the hotel and travel industries are bouncing back. The first half of 2021 saw UK hotel investment volumes reach £1.70bn, which is a +135.2% increase versus the previous 6 months.
Since the 2019 plunge, the hotel sector started to regain its strength. Investment volumes in franchise hotels are on an upward trend and exceeding the 5-year average, and turnover and fixed leases have been following a similar direction. This optimism leads industry experts to forecast further growth in 2022 as volumes are expected to reach £4.5bn, and so investor appetite is rising.
Modern, branded hotels from Propiteer Capital
Experts at JLL predict that adapting to the user experience will be a key transformative trend for the UK real estate market in the near future. The end-user will be at the heart of every consumer-based business, and the pressure is on to deliver a unique and memorable experience.
At Propiteer Capital, we’re pleased to be able to cater to this emerging trend with several new hotel developments coming this year. Due to our strong relationship with world-class hotel brand Marriott International, we’re working to introduce new and exciting franchise hotel developments with a consumer-based focus in mind, and service new demand for young travellers, providing stylish, edgy, and fun places to stay at affordable prices. This also means that we’re able to meet not only growing investor demand in this market, but also the supply and innovation demand.
Later this year, the booming and modern city of Belfast is planned to be home to a 7-storey Moxy by Marriott hotel. With a gross development of £26.9m, the 164-bed trendy hotel with a Sky Bar will be situated on the old Nambarrie Tea factory and will cater to Moxy’s key demographic and urban destinations, with convenience and a unique experience offering as top priorities.
For sophisticated and high net-worth investors looking to get involved in commercial property, our Branded Hotels product offers an annual profit of 6.0% with a minimum term time of 24 months. Visit our website to find out more about the investment type and details on how to get started.
Housing development investment opportunities
With a 10.4% rise in the average house price, 2021 was the best-performing year for the UK housing market since 2008. Initially fuelled by lockdowns, Brexit, the stamp duty holiday, and extended homeworking patterns led to the race for space, and the market’s on-going strength is expected to continue this year, albeit at calmer levels.
While the rising interest rates pose higher initial costs, this also means that the house price index as well as rental costs are on the up, leaving investment opportunities open. Also, as the gap between supply and demand widens, at Propiteer Capital, we’re able to contribute to narrowing this gap by introducing a range of key residential projects for sophisticated and high net-worth investors.
Rightmove’s director of property data Tim Bannister reports that there is a “higher demand to live near London, with buyer demand returning towards pre-pandemic levels”, and our housing development in Abbots Gate, Suffolk is a prime example of servicing this demand. With a gross development value of £27.3m, the site will feature a range of apartments as well as 35 modern town houses in this bustling commuter town with easy transport links into larger cities like London and Cambridge, making this area suitable for a varied target market, from first-time buyers to established professionals.
For a convenient and hands-off way to invest in our BTL projects, our Residential Rentals investment type offers an annual profit of 5.0% with a fixed duration and a minimum term time of 12 months. To find out more about how to get involved in our housing development investments and their diversification prospects, visit our website.
Apartment builds investment opportunities
Bannister adds that “City centres are staging a much-needed comeback in the market”, and it’s been found that, despite the initial surge in houses, flats – particularly in suburban areas – are regaining popularity. According to Rightmove, the increase in buyer demand throughout the first quarter of 2021 was:
· Flats – 39%
· Bungalow – 30%
· Detached house – 26%
· Terrace house – 24%
· Semi-detached house – 23%
Our flagship town centre redevelopment project, which could be the biggest private rental scheme in Ireland, takes place in Clondalkin, one of the two most prominent regions to be developed in South Dublin.
With a gross development value of £613.1m, the bold vision for Dublin will bring over 900 modern apartments to the town, which will be ideally situated next to the Mill Shopping Centre, and enhanced by local parks, retail and leisure outlets, and childcare facilities.
The new apartment blocks will also contribute to solving Ireland’s, and in particular Dublin’s, housing shortage.
Commercial property investment opportunities
The above graph displays that investor appetite for UK commercial property has been on a steep incline in the last couple of years. The hotel and leisure sector in particular struggled throughout the pandemic as lockdowns and new government measures meant that both domestic and international travel was largely prohibited until a few months ago. Now, industry experts are optimistic as travellers re-gain confidence and the industry on a regional level is expected to balance out by the end of 2023, according to predictions made by Avison Young below.
At Propiteer Capital, our Hilton Duxford project offers an innovative contribution to the bounce-back of commercial property. The unique 6-storey Hampton by Hilton will be complete with 168 rooms, a bar and restaurant, a lounge, gym, and meeting facilities. The hotel will also offer world-class services and opportunity to the Imperial War Museum, Europe’s most-visited air museum.
Residential investment opportunities
Based on JLL’s forecast report, UK house price growth has been at its highest in the last year since before the Global Financial Crisis. Looking ahead at London and the South East in particular, it is predicted that high demand for housing in rural towns with easy access to the capital city will continue.
In the commuter town of Brentwood, Essex, our Brizes Park residential development is in a prime location for those needing occasional but convenient access to London while still having the option of escaping the hustle and bustle of the city.
The site covers 75 acres and will feature a range of private luxury new-build homes and 2,3 and 4-bed apartments within the conversion of a grade II Georgian mansion and its grounds. The stable conversion in particular will boast its own private woodland, offering beautiful views and peaceful surroundings.
Diversification in property
A key benefit of a diverse investment portfolio is to create a risk-averse collection of assets. The idea behind this is so spread the potential impacts of market shifts across your investments so that a single asset is never exposed to maximum volatility. If diversification is one of your investment priorities, then our vast development portfolio can offer a convenient solution. Our range of projects as a collective presents practical, passive, and large-scale diversification opportunities within the property space.
Our financial investment opportunities include Residential Rentals, Branded Hotels, and Development Properties, which span across a global level and offer flexible investment options with varying fixed rate returns and terms times. The locations of all our developments are researched thoroughly to ensure they are in demand, meaning that we’re able to deliver a variety of properties in profitable locations, which offers investors a unique way of getting involved in real state with significant and convenient prospects for diversification.
To find out more about Propiteer Capital and our key property investment products, visit our website.
Recommended Read: Planning Permission for Hilton in Duxford Granted