Jones Lang LaSalle - General - Property Report

Date: 26 Apr 2000

A report from international real estate advisor Jones Lang LaSalle has highlighted increasing competition within the Manchester hotel market and the subsequent pressures faced by existing players and developers entering the market

Jones Lang LaSalle Hotel's Digest Europe, found that following strong improvements in hotel trading over the mid-1990's, Manchester has in recent years been affected by a substantial increase in new supply. Room supply increased by 13.1% during 1999, yet there are currently 10 additional new hotels under construction set to enter the market by 2002. This will increase by a further 23.4%.

The report found that as a result of the new supply, room yields have declined over the past two years, driven down by declining occupancy, which in 1999 fell by 3.9% to 71.3%.

Jones Lang LaSalle predicts that continuing supply growth will result in both occupancy and room rates coming under further pressure over the short term. Andrew Shaw, National Director in charge of Jones Lang LaSalle's Manchester office, commented

"Despite the immediate pressures on the hotel market, the outlook for the medium to long term is excellent with Manchester receiving a boost to its international profile when hosting the Commonwealth Games in 2002. In addition, there are numerous ongoing infrastructure developments underway which will increase demand from the burgeoning leisure segment."

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