Manchester City is UK’s second for serviced apartments
By Simon Binns Crain’s Manchester Business
Manchester’s serviced apartment sector is growing and now boasts the biggest range in the UK outside of London, according to a new report from agents Savills.
The capital leads the way by some distance, with 5,200 units. However, Manchester currently has 338 units followed by Birmingham (258), Leeds (143), Bristol (125), Edinburgh (207) and Cardiff (42).
Serviced apartments in Manchester city centre include The Place, near Piccadilly Station, and Days Inn and Premier Apartments, both in the Northern Quarter, and new developments such as BSC Group’s Issa Quay on Dale Street are expected to come onto the market soon.
The Savills report claims that income returns for serviced apartments have outperformed the residential investment sector, averaging 4.4 per cent over the last three years, compared to 3.7 per cent for the private rented sector. The report predicts this trend will continue in 2008 with similar income returns of between five and 5.5 per cent.
Adrian Archer, director of Savills hotels division, said branding would be key to raising the profile and appeal of the sector. “This can open the sector up to new sources of demand, such as new international markets and the leisure sector. This could drive further expansion.” Further supply would also depend on developers coming into the sector, the report said.
“Past investment performance and its exclusion from affordable housing requirements makes this sector attractive to developers,” said Archer. “It also gives them the option of selling units back onto the private residential market at a later date realising any potential future uplift in values. This has become increasingly attractive in markets suffering an oversupply, combined with thinning demand for city centre flats.
“But if developers want to get maximum value from their scheme they should be looking to get an operator on board at an early stage”.
Mark Hiscock is general manager at Premier Apartments Manchester, on Shudehill. He said that some business travellers prefer the home-from-home feel of a serviced apartment when on business travel.
“A lot of our customers have stayed in hotels before but like the extra space and flexibility of serviced apartments,” he said. “People often like to have a bit of independence when they are travelling for business. We have a reception if people need to contact us, but some people like to be left alone and want a more hands-off approach.”
The room rate at Premier Apartments is £90 for a one-bedroom flat, but it can increase to £200 on a busy night. “Some times are busier than others — conferences season and Manchester United fixtures are the busiest time,” he said.
“During the week, our customers are predominantly corporate. We have quite a few regulars who will stay Sunday to Thursday or Monday to Friday. We also have long-stay relocations or assignments. Some stay for as long as three months.