Now, more than ever, property investors will be seeking safe havens and thriving markets which promise strong and reliable returns. Could the nascent, but fast-growing, serviced accommodation sector be one of these avenues?
Alesco Investment Properties was recently appointed as exclusive agent on Carnaby Place, a new luxury residential development of 96 units on the emerging Regent Road, minutes from Manchester city centre and with expected yields of up to 10%.
With over two decades of experience in the field behind it, Alesco – which was founded in 2016 – says its appointment ensures that homes within Carnaby Place will only be sold via a handful of ‘trusted, highly-skilled agents’.
The firm says that Carnaby Place represents an excellent opportunity for any property investor’s portfolio, with apartments being sold at 20% below market value. This, teamed with the recent stamp duty cuts announced by the Chancellor, means now is a potentially ideal time to invest.
Carnaby Place provides a professional management service which allows investors to rent out the homes as short-term lets and serviced accommodation.
What is serviced accommodation?
Described as the fastest-growing asset class in Europe, with the ‘returns generated from a serviced apartment let on a short-term basis outweighing those of a traditional buy-to-let purchase’, earnings from this type of apartment average between 30-35% based on 75% occupancy levels.
These projections mean investors could expect to double their returns in comparison to a traditional long-term let, Alesco says. Meanwhile, the rising demand for serviced apartments would make the apartment simple to sell in the future should an investor ever wish to do so.
Serviced apartments are typically fully furnished units in town and city centres available for short or long-term stays. They normally provide hotel-style amenities, room service and housekeeping, and are frequently used by businesses to house their workers on a temporary basis.
However, despite the strong returns they provide, why have serviced apartments remained such a niche part of the market? They tend to only work in specific locations – where demand for this kind of let is high – and converting homes into fully furnished, hotel-like, luxury apartments takes time, effort and money. Management of these apartments can also prove costly.
Additionally, the coronavirus crisis may affect the serviced accommodation market as there is a downturn in business travel and transient renting.
Despite this, there is a growing demand for a better than average renting experience, as evidenced by the growth of Build to Rent, co-living and purpose-built student accommodation in recent years. All these sectors aim to offer hotel-like facilities and amenities, as well as hotel-like luxury.
Carnaby Place itself is aiming to provide a vibrant living space for Manchester’s young, professional community, offering 96 one to three-bedroom apartments and a limited range of three-bedroom townhouses. These are arranged around a centralised landscaped communal garden, with seating and social areas available for residents to enjoy.
Providing upscale city centre living is the aim, with the development under 10 minutes’ walk from Manchester’s shopping district. The apartments also aim to provide a sought-after lifestyle, with a 24/7 concierge service, gymnasium and secured residents parking, ‘setting a new standard in urban living’.
The apartments themselves benefit from a high specification, with keyless and CCTV-monitored entry to all buildings and luxury furniture packages available starting from £2,499 for a one-bedroom apartment.
These include comfortable soft furnishings, chrome ironmongery and walnut laminate flooring, while the bedrooms include desks, chests of drawers, curtains, roller blinds and recessed dimmable spotlights. The kitchens also include high-quality integrated appliances, such as an oven, dishwasher, fridge/freezer, glass splashbacks and stainless-steel finished sinks.
Manchester – world-renowned for its culture, football and industrial heritage – has long been considered as one of the prime locations in the Northern Powerhouse, and consistently outperforms most other cities in the UK with regards to property prices. This trend has only been accelerated by Covid-19 and the reduced need to be in London.
“Here at Alesco, we believe Manchester will be at the forefront of the economic recovery post-Covid-19 and we proud to be the exclusive agents on such an impressive scheme right in the centre of the city,” Matthew Fawl, managing director at Alesco Investment Properties, said.
“Carnaby Place is the ideal purchase for any young professional looking for key amenities and stylish city centre apartments, at a fraction of the price of London. Additionally, it’s the ideal purchase for a savvy investor looking to achieve attractive returns.”
Prices start at £135,000. For more information, you can visit: https://www.alescoproperty.com/ or call 0203 819 7366. The development is scheduled for completion in Q2 2022.
This post has originally been featured in Property Investor Today.