Further Chinese acquisition of London hotels is expected alongside a growth in the number of Chinese groups looking to establish their brands in the UK, according to real estate company Savills.
According to statistics from Real Capital Analytics (RCA), Chinese investors have spent approximately £1.6b outside of their domestic market over the past five years, at the same time as overseas Chinese tourism has boomed.
In the UK this has amounted to the acquisition of around 18 hotels and hotel development sites by Hong Kong and mainland Chinese purchasers, spending nearly £450m in the past five years. Savills estimates that over the next three years investment by this group in UK hotels could more than double with an annual average being spent of £200m.
Savills reports that Hong Kong and mainland Chinese purchasers have acquired approximately 18 hotels and hotel development sites in the UK over the past five years spending close to £450m. The firm estimates that over the next three years investment by this group could increase to more than £200m per annum.
Forthcoming Chinese investment in London includes the backing of the Hyde Park Corner site for a proposed 100-bedroom Peninsula hotel by the Hong Kong & Shanghai Hotel Group and the Nine Elms site by Wanda Hotels and resorts, which will develop the first mainland Chinese brand in the UK with the development of a 160-bedroom luxury hotel.
Marie Hickey, associate director of research at Savills, said: The faster growth in independent Chinese travellers to the UK means that location and reputation will become increasingly more important when selecting accommodation providing opportunities for Chinese operators to enter the UK market.
"However, we suspect that this is unlikely to be on a large scale. While there will be operators, particularly in the upscale sectors, that will make the leap into UK and European markets, for the Chinese budget and midmarket brands the initial focus is likely to be on the wider Asia Pacific region."