Olympic win fuels hotel investment

Securing the 2012 Olympic Games has fuelled unprecedented demand in London's hotel investment market.

After the announcement in July last year, costs for hotel stock have hit an all-time high, according to property agents Colliers Robert Barry (CRB).

Prices for a typical mid-market London hotel are now nearly at £200,000 per bedroom, compared with £100,000 only six years ago.

Initial yields for new operators have also come down to between 5% and 7%.

CRB director Colin Hall explained demand in the past year had been fuelled largely by European hotel companies, especially from the Spanish market, showing interest in London.

The past six months has also seen the re-emergence of Far Eastern buyers.

Hall said: "This is their (Far Eastern buyers) first serious foray into the market for almost 10 years.

It's likely we will see deals concluded this year with a number of these buyers as well as continued activity with European groups and existing London operators looking to expand."

By Emily Manson

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