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Savoy makeover adds to London hotels’ woes

Posted on 24 Sep 2009 | Comments Off

The Savoy, the 121-year-old London hotel that has hosted Elizabeth Taylor and Claude Monet, may add to strains on the city’s luxury guesthouses when it reopens next April following British hospitality’s most expensive renovation.

After last year’s collapse of Lehman Brothers Holdings Inc sparked a slump in business travel, the belated and overbudget completion of the Savoy’s makeover will dump 268 luxury rooms into a market suffering a dearth of bankers and corporate guests.

Even with the Savoy shut, revenue at London’s upscale hotels this year has declined the most since the Sars outbreak in 2003, according to STR Global, which tracks the industry.

‘Luxury properties are going to feel it when the Savoy opens,’ said STR Global analyst Konstanze Auernheimer on Tuesday. ‘In these market conditions, when it is already tough for everyone, it has been a blessing for rivals to have it out of action.’

Savoy manager Kiaran Macdonald said he’s counting on an economic recovery by the time the property reopens, almost a year later than planned.

The delays to restoration work meant the hotel missed the worst of the market’s decline, although the final cost to owner Prince Alwaleed bin Talal will be ‘a lot higher’ than £120 million (S$277 million), Mr Macdonald said, compared with an original budget of £100 million. Continue reading →

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Posted in Overseas Property

Tagged London Hotel, London Property, The Savoy, UK Property

London still the place to be

Posted on 24 Sep 2009 | Comments Off

Singapore and Asian investors now see the City as a safe long-term investment, and as long as the sterling is low they will be buying

THE UK property market is waking up, prices are rising and the British pound is regaining its strength. The good news is that there are still bargains to be had for astute overseas investors.

The first recommendation for buyers is to get an opinion, via a friend or relative in the UK, to check if the location really is where it should be – that is, ‘24 minutes from Bond Street’, or ‘within easy reach of London’s top schools’.

Many buyers may be tempted into a purchase that, while looking like great value on paper, would offer little opportunity for capital growth and is probably not attractive to tenants. Having said that, there are still opportunities to be had, especially in the established locations, to make the Singapore dollar sweat against the pound sterling.

According to the latest quarterly index from Savills Research, prime central London prices rose by 4.3 per cent in the three months to June, effectively wiping out the falls seen in the first quarter. By any measure, this is a significant quarterly growth. Continue reading →