It has not gone unnoticed in the Americas that the European, and particularly the UK, serviced apartment and corporate housing markets are growing fast, performing well and attracting institutional investment. The UK saw a 5.5 per cent increase in REVPAR during H1 2017 according to figures from STR and ASAP, a 1.7 per cent rise in occupancy to 79.2 per cent, while ADR increased 3.8 per cent to £139.08. The recent sale of SACO by Oakwood to Brookfield was the biggest transaction in the UK to date and was notable for both buyer and seller being US-based private equity houses.
But it’s not just US money that is coming to the UK, as a number of US operators have established a presence here. In May 2016 Blvd Suites Corporate Housing opened its office in London, its first outpost outside of the US. The office services client needs in Europe, while facilitating temporary housing needs in the Middle East, Africa, Asia and the Pacific Region.
“We have achieved tremendous success due to our culture, and our incredibly passionate team that deeply believes in it,” said founding partner Mike Dunklee. “We recognise it can be challenging to maintain culture over multiple times zones, and now continents. That is why we hand-picked our London team based on their strong belief in doing the right thing, being innovative, and providing personalised solutions.”
The following year, in February 2017, National Corporate Housing, one of America’s largest temporary furnished accommodation specialists, launched operations in the UK, with a £20 million war chest to invest on leasing properties in London over the next three years. The launch was the result of demand from National Corporate Housing’s US client base for temporary accommodation in the UK.
The company, which has 28 offices across the US, has assembled a London team focused on renting well-located properties from institutional landlords and PRS developers between zones 1 to 3 across the capital. It looks for between five and 50 units per development. The company says it will consider purchasing its own properties in future and is interested in acquiring other firms.
Tom Atchison, CEO of National Corporate Housing, said: “Following demand and agreements in principle from our existing client base, the time is now right for us to make a strategic expansion into the UK, starting in London but with long term plans to spread out to key cities. We are in a unique position in that our end customer database is already in waiting, so we can focus purely on sourcing high quality units in attractive locations with good transport links. The capital’s property market is going through an interesting time, with an increasing dearth of institutional landlords staking their claim and the rise of Build to Rent. Occupancy rate has always been at the top of our priorities and we have a proven track record in being able to hit the crucial last five percent, generating solid and more importantly, consistent, returns for the landlords that we work with,” he added.
It is not only traditional corporate housing operators entering the UK. Property management firm Sonder, formerly known as Flatbook, opened an office in April 2017, headed by its former Chicago head of real estate Chicago Chris Wawak. Wonder described itself as a lodging experience with all the local charm of a traditional vacation rental but none of the inconsistencies. The company manages the entire rental process, from pricing and booking to 24/7 guest support and professional cleaning.
The last two companies mentioned opened their London offices after the Brexit referendum of June 2016, but the as yet unknown consequences of the UK’s withdrawal from the EU could potentially deter further US operators from establishing a base here.
In January of this year, relocation specialist Dwellworks acquired Irish Relocation Services (IrishRelo) and its temporary housing division, the Corporate Housing Bureau. It is also opening a new office in Dublin, and later in Belfast.
The company said: “In a post-Brexit environment, Dublin has become a highly competitive market for businesses to open their European headquarters. With this recent surge of relocating offices and companies, the capital of Ireland is witnessing an increase in individuals visiting the city for work. With its sophisticated public transportation system, and its variety of restaurants, cafes, and entertainment venues, Dublin and its surrounding suburbs are an ideal city for expatriates to reside”.
As the conditions of the Brexit agreement eventually become clear it will be intriguing to see whether London retains its allure for overseas operators, or whether the appeal of EU capitals such as Dublin begin to look more appealing.</p
