Reading’s positive reputation as a business hub and the considerable development around the city centre has given the town a strong corporate visitor base for its hotels, Georgie Liggins of Savills writes. As a result the market is remarkably consistent with little seasonal change.
Recent years have seen significant development around Reading Railway Station, with the upgrade of the station costing £895 million. Lincoln MGT is planning a redevelopment of the former offices at Station Hill to include 250,000 sq ft of premium office space and 538 build to rent homes in Phase 1. Station Road is set to see the development of a 135-bedroom midscale hotel with office accommodation above, which is currently in the planning process.
According to STR, there are 60 hotels in Reading, equating to 3,535 guest bedrooms. Over half are branded hotels, with the most prevalent brands including Premier Inn, Travelodge and SACO. Interestingly, there have been no hotel closures in the market over the past three years. Looking to the future we anticipate a further influx of branded hotel supply as hotels provide diversity to the mixed-use schemes in the pipeline.
This extra provision of both hotel and office space go hand in hand – as Reading consolidates its position as a home to many of the world’s largest brands – there will be an increase in business travellers. Microsoft, Oracle, Cisco and Nokia all have bases in the town, which is ranked in the top 25 most attractive European cities for foreign direct investment according to The Financial Times. There seems to be no slowing down of Reading’s business reputation and it is predicted to be the fastest growing economy in the UK over the period 2018-2021 (EY).
Development isn’t just limited to the economy and the business population. On the southern edge of the town Reading Football Club is planning an international convention and exhibition centre adjacent to the Madejski Stadium, alongside a hotel, ice rink and housing. The successful Green Park Business Park is adjacent to the expanding Green Park Village which is set to see further housing, retail, leisure, educational, healthcare and business accommodation. Both developments will be further supported by the planned £2.3m Green Park Railway Station which is anticipated to open in 2020.
Closer to the town centre, Broad Street Mall has received approval for a 101 bedroom Premier Inn on Hosier Street which is anticipated to form part of a wider development, comprising 530 residential apartments situated on top of the shopping centre.
Looking at the fundamentals, Reading’s hotel market is clearly performing well. In 2018 the town’s hotel market saw occupancy levels reach 71.5%. The annual daily rate and revenue per available room currently stands at £82 and £59 respectively.
As the developments mentioned above and others occurring in the town and local surrounds progress, we will be keeping an eye on hotel investor demand, as we expect Reading to go from strength to strength.
Georgie Liggins is a chartered surveyor and part of the hotel transactions team at Savills.