An excellent London hotel project with good returns and potential for capital appreciation

Barking Hotel London

Principal International are delighted to announce the launch of this excellent investment opportunity within the London hotel market. The Barking Hotel is offered at a discounted price, substantially below the RICS valuation. Investors are rewarded with a return, based upon the net profit accumulated from room usage and other areas of the hotel's operation based upon room type, etc. The projected returns are in excess of 10.6%.

Investors are able to take advantage of the non-status finance offered for the project at 70% of the purchase price.

The landmark building will be set over 21 floors and will offer 207 bedrooms in addition to a restaurant, bar, conference area, car parking, residents gym and roof garden. These properties represent a truly hands off investment and purchasers will have peace of mind that their hotel room will be operated under the umbrella of an established major hotel brand and will be managed by a world renowned hotel company.

The hotel on Wakering Road will benefit from excellent access to rail and road links and central London and the M25 are easily accessible. Central London is merely 15-minutes away by London Underground and this hotel is targeted to provide 4* accommodation within the area at a reasonable price point.

The rooms will be purchased on a similar basis to a traditional leasehold apartment with a 199-year lease. The developer will pay the VAT on behalf of the investor, saving a substantial outlay of almost £22,000 and the purchase of these hotel rooms won't attract stamp duty. This hotel investment we are advised is also suitable for SIPP purchase, subject to approval by the individual SIPP provider. Investors can also be reassured that the deposit for the purchase is protected by an insurance scheme.

There is substantial demand for hotel accommodation from the local corporate sector, which is expected to increase in line with the economy. The hotel will have the advantage of being located close to major local companies and also the settings, brand and surroundings will distinguish this hotel from the other hotels in the area.

Recent findings have also identified demand for good quality, affordable meeting and function rooms in the Barking area. The strong brand of the hotel and the available facilities should enable the hotel to achieve a reasonable share within this market. In a recent survey of the top 20 local companies, over 70% advised that they use local hotels in the area.

The location of companies located around the Thames and A406 link road demonstrates a good potential client base close to the site of this hotel. In addition to the local businesses, London's business district is very close by and this is expected to be a significant demand generator.

Local companies experience difficulty in finding accommodation in the area, this is particularly relevant when major events are taking place in London. Other factors such as events at the ExCeL centre and the O2 Arena can also result in a lack of accommodation and an increase in local hotel prices. The ease of access to public transport and parking indicate that this hotel will benefit from "over spill" demand during major events in the area. A number of corporate and leisure demand generators are located in the area and these include the ExCeL Centre, the O2 Arena, National Maritime Museum, the Royal Observatory and the Royal Artillery Museum.

A recent professional report has indicated strong support for a hotel of this type and quality. The report also suggests that some of the demand is currently not being met and potential clients are looking further afield to find suitable accommodation. London hotels are regularly desired by short break and tour operators looking to provide a London experience, it is expected that this hotel will attract a fair share from the coach and tour market on the basis of the strong brand and position. The current hotel supply does not meet the requirements of this sector.