• What challenges have you experienced sourcing property in London and other UK cities?
“The UK property market is currently receiving significant global interest. There are always challenges, but with the team of experts we have at SACO, we have now acquired and will be delivering more than ten new properties, in London, Edinburgh, Aberdeen, Dublin and Amsterdam. Our pipeline is strong and we hope to be announcing very soon, some exciting new developments and acquisitions.”
• What’s it like working for (and being owned) by private equity in comparison to your previous role?
“We have had an incredible journey, with Oaktree Capital Management, who couldn’t of been more supportive of the business. The team at OCM are focused on deploying equity into the sector, which is key and is making a significant impact on the investment credibility of the industry. So relative to my previous role, which was exclusively operating company focused, there are significant differences, but as always with the same end goal; to be part of an industry that’s creating, demonstrating and validating its long awaited position, as a credible hospitality sector and an institutionally acceptable investment class.”
• Oaktree Capital purchased SACO earlier in the year, what have been the main challenges incorporating both businesses?
“The challenges of integration have been minimal – the work load has been significant, but we like that sort of problem! The whole SACO team had to quickly get to understand and digest the enormity of the projects, which are forthcoming over the next two years and adjust to that new timeline. All the teams have worked seamlessly together to ensure, we protect the existing business, prepare for the scale of the new properties and their extend geographical spread. Stephen Hanton and I couldn’t of asked for more
• Have you had to adjust your launch plans due to changing market dynamics – if so how?
“Not at all, in fact our customers are pushing us to deliver our portfolio, faster than ever.”
• What have you learnt so far, and are you on target?
“Actually we are ahead of target, which is a credit to the team. What have I learnt so far – firstly, the ability for this sector to compete within the commercial asset world, continues to surprise me. We are daily reviewing projects, whereby we, as an industry, continue to compete, with all the other asset classes. It’s a testament to the sector. Secondly, the changing needs of the consumer, through their complete buying experience, from search, review, buying, arriving, interacting and departing, is a new world, as an industry, we all need to ensure that we are considering tomorrow today.”
• Are there plans to export the Beyonder brand overseas?
“Right now, we are in double digits with UK projects, so we have plenty to do. That being said we are always looking for the next opportunity and if the investment is right, financially, for our customers and the business, we will always consider. I will be at Heathrow next week!”
• What are your thoughts on investor appetite for the sector, since the Oaktree Capital and Starwood Capital deals earlier in the year?
“The global private equity investors will continue their acquisitions, with their search for yield. Fund structures are adopting to a new interest rate environment and will continue to chase yields down. This makes the UK very well placed given a supportive regulatory and legal environment, well established and efficient legal system and pro-business government.
• In the chase for yield and migration of capital, how compelling is investment in the sector against other hospitality asset classes?
“We review hundreds of opportunities each year, many of these come to the table with the tag of hospitality. As a competing sector of hospitality, we compete side by side across all the segments and tiering, within the industry. The IRRs the industry delivers stand well against other hospitality segments. However the residential market, in some micro-locations, is currently so strong, that on those occasions we accept that we are unlikely to be able to compete.”
• What’s the outlook for the sector in your view?
“We have seen significant support from the big PE firms for the sector. The British Hospitality Association has supported with the creation of a committee whose sole purpose is to focus and support serviced apartments. ASAP has been working hard to consolidate standards within the operators, and the consumer is adopting the concept, so the outlook is strong.”</p
