Dublin firm finds room for growth in Brexit-era London
DESPITE the Brexodus of jobs from the City in London, the uncertainty across the water is proving to be an opportunity for one Dublin-headquartered company catering to the accommodation needs of corporate travellers.
Serviced apartments giant Staycity, which caters for short- and long-stay travellers, has capitalised on the gloom in London’s housing and office market with a major new development in the Paddington area in the city.
“London is a big focus for us at the moment and it’s probably one of the best times we’ve seen in the last 10 years to try to get some stock there,” Staycity co-founder and CEO Tom Walsh told the Sunday Independent.
“Last year we signed a couple of deals but the Paddington one is the only one in London that we’re developing ourselves, although we did sign for zone 1 [central London] as well near Aldgate East.”
In a vote of confidence that it will be a case of business travel as usual post-March, Ireland’s largest hotel group, Dalata, also announced expansion in Britain. It is working on its first Maldron hotel in Scotland, to be based in Glasgow, as well as a Clayton hotel in the centre of Birmingham.
Staycity’s Paddington development is a joint venture between it and two British companies to acquire the site, with forward funding for the development from investor M&G.
The uncertainty in the UK has helped, Walsh admits, with one barometer revealing that the number of residential properties changing hands at a 10-year low in 2018.
“We’re trying to do a bit of damage in London now,” Walsh says.
He explains how times have changed: “What normally happens is that when high-end residential is going well it’s very hard to compete.
“If you’re a developer with a site you can get £2,000-3,000 a square foot — and it’s high-end residential that wins out every day. But because it’s gone off the boil a bit in London, and office accommodation and student accommodation are also not so competitive now, the door is slightly more open for hotels.”
Even so, it’s still a tough market to crack, hence the move to get the site’s land, which will be used for a Staycity Aparthotel, with the construction of a hotel too, to be operated by major UK chain Premier Inn.
“We were trying to take away some of the competition in terms of getting sites,” says Walsh.
“In London it gets very competitive. We thought if we could get our hands on it at site level before a developer does we’d have a better chance of making it happen. If a developer gets their hands on it they’ll show it to the entire market and whoever bids highest will get it, so it becomes unmanageable cost-wise.”
Walsh says “we’re huge believers in London and we like to do more. We’re chasing plenty more there”, but the chain has also moved further into regional Britain, with three properties under way in Manchester and two in York, to supplement existing properties in those cities.
Staycity operates in a competitive — and growing — market, which includes major chains such as Bridgestreet and Saco. A recent study by Savills UK revealing the growth of the alternative-to-hotels sector, with 37.5pc highlighting expansion plans, fuelled by growing demand from the corporate stay sector. Walsh cites the rise of the digital nomad “flipping around different cities in Europe”, looking for an alternative to the big hotel chains
“If you’re a corporate working away for a bit longer, that home-from-home feeling is desirable,” says Walsh, although overnight short stays are also catered for. “It knocks the socks off the hotel experience,” he says, given that pluses include the ability to self-cater in your own “home”, one which features housekeeping staff, receptionists and management on site.
On top of the UK, as well as France and Germany, the company is also looking to expand further in its native Dublin.
Chancery Lane opened in December — its first purpose-built location in Ireland, with work now on sites in Francis Street, Mark Street, Moss Street and Little Mary Street, with openings at the end of next year and into 2021.
“We’ve gone fairly big in Dublin,” says Walsh, “we’re chasing one other deal which we’re hoping to get papered in the next month or two.”
From a current base “just short of 250”, the company is reflecting the growth of the alternative lodgings market, with 1,200 new apartments opening by 2021.