GSAIR 2025 | Page 86

8. High occupancy will continue in 2026 while rate growth gradually normalises. 26 Occupancy will be highest in London( thanks to persistent demand from both corporate and leisure sectors) Edinburgh( due to high demand and constrained supply) and Manchester( due to robust

27, 28 demand from business, students and relocation).

9. Longer average lengths of stay will persist. Operators reported an increase in the Average Length of Stay( ALOS) in 2024 due to growing demand for extended stays, blended travel, and relocations. 29 Operators’ business mix and apartment design are gearing to 7 + and 30 + night stays, so momentum should hold in 2026. 30

10. Corporate relocations will feed bookings, with UK relocation enquiries up 8 % year-on-year in April 2025. 31

1. Expect a steady stream of UK openings as supply expands by 4,950 rooms in the next five years. 17

2. London stock will jump by 26.7 % by the late-2020s, with 3,000 units committed in London. 18

3. The serviced apartment market will double in value to £ 6.52 billion by 2033, a CAGR of 8.8 %. 19 Corporate demand will continue to fuel serviced apartment growth. 20

4. Investor appetite will strengthen as serviced apartments rank highest among hotel sub-sectors for buyers. 21

5. Strong lender interest and favourable financing for the asset class will drive new projects and refinancings of existing ones. 22

6. Transaction activity will gather pace, signalling improving liquidity. Expect UK hotel single-asset deals, up 8.4 % year-on-year in the first half of 2025, to spill over into serviced apartment deals in 2026. 23

7. Due to lower build costs and speed-to-market, office-to-aparthotel and other conversions will contribute significantly to new UK supply in 2026 – 27. 24 Between 2022-2024, 3.3 million square feet of office space in London worth £ 2.5 billion was sold for conversion into alternative uses, including hotels and serviced apartments. 25

11. Branded operators will dominate UK openings in 2026 and beyond. 32

12. 2025 tie-ups like Your Apartment and Homes & Villas by Marriott Bonvoy, point to more platform partnerships in 2026, which will widen corporate and leisure reach, and deepen distribution partnerships. 33

13. Hotel majors will push apartment-style brands, illustrated by the Marriott / Reside / Mint House momentum in upscale extended stay; expect further UK activity and brand entries in 2026. 34

14. London will remain the primary beneficiary of capital investment, followed by Manchester and Birmingham. Liverpool and Leeds are also on investors’ radars as new schemes come on stream. 35

15. ESG-led retrofits will become more common. With conversions prominent 36, expect retrofit / ESG capex to feature in 2026 underwriting and branding( energy, materials, and smart controls). 37

16. The convergence of serviced apartments and Co-living will gather pace alongside the rise of Build-to-Rent; anticipate blended projects and amenity set in UK cities in 2026. 38

17. Sector outperformance compared to hotels will keep attracting capital. Limited-service models display higher profit margins than full-service hotels, consistent with aparthotel economics. 39