Following the relative slowing of the hotels market in London, investors are increasingly looking to both primary and secondary towns and cities outside of the Capital in order to maximise their returns on investment.
The second most highly populated UK county, the West Midlands is a diverse area comprising of parts of the counties of Staffordshire, Warwickshire and Worcestershire. It’s home to no less than ten Football League teams, the birthplace of William Shakespeare and has five Areas of Outstanding Natural Beauty, as well as a UNESCO World Heritage Site at Ironbridge Gorge.
In recent years, Birmingham has witnessed a major transformation, with the redevelopment of the New Street Station and Grand Central complex, which houses 60 stores across 500,000 sq ft, with John Lewis as the trophy tenant. The Bullring shopping centre has played a large part in bringing 34m visitors to the city over the last year, and the tourist economy is now worth a record £5.34bn to the local economy. No wonder it’s hugely attractive for both funds and high net worth individuals.
Across the West Midlands, we’re seeing an influx of buyers moving from the care sector into the hotels market. Issues with regulation of care and nursing homes are pushing these operators away from their known sector and towards diversifying into the hotels market.
Looking at the latest AMPM data, it’s clear that the budget hotel chains still have a massive hold on the market across the county, with Premier Inn, Travelodge and Holiday Inn alone making up nearly a quarter of the letting rooms. However, the West Midlands – not only Birmingham, but also the hotspots of Lichfield, Stratford Upon Avon, Telford/Ironbridge and Solihull - is attracting attention from hotel buyers, particularly from those smaller operators who tend to own from 1-5 hotels already who are looking for classic hotel investments – the country house, the boutique, and the wedding venue.
Hilton, the fifth-ranked operator in the West Midlands currently holds 3.1% of the market, with over 1,368 rooms in the region – more than twice the number of Novotel, its nearest upmarket rival. Indeed, Christie & Co helped maintain its presence in the region by brokering the sale of the Hilton Bromsgrove in April 2016 – a deal which kept 146 rooms under the Hilton brand.
We’re also seeing the speed of hotel sales changing across the West Midlands region, showing how interest in the area is increasing. There’s a Black Country saying about going “around the Wrekin”, a reference to a well-known hill in Shropshire meaning to take the longer, more arduous route to a destination. However, only last week, we sold a hotel in Oldbury which went on the market late one afternoon, and had been sold by lunchtime the following day. More a case of the direct route than anything else!
Indeed, the rise in the numbers of overseas enquiries that we are seeing is rising dramatically and proves that the area is on the radar for global investors, and not just those local buyers who know what the West Midlands has to offer – which is plenty, and you don’t have to go “around the Wrekin” to find it.