Top five adjacent spaces

Radisson

With the traditional hotel investment moving into the mainstream, investors looking for greater returns have shown themselves prepared to take greater risks and look on the periphery, at what has become known as ‘adjacent spaces’.

Coworking

As countries came out of lockdown and people were encouraged, in varying degrees, to go back to work, coworking grew in popularity, with even the brands moving in on the Working From Hotel trend. Jessica Jahns, head of hotels & hospitality research, EMEA, JLL, said: “Across all real estate sectors, more cross-sector collaboration is needed and is now emerging. That’s particularly true for the hospitality industry as it seeks new ways of operating after a long period of closure and low occupancy. It’s about turning redundant areas into much-needed revenue.”

Students

Student housing had been a massive growth area before the pandemic, as the number of students around the world continued to grow. This has seen a short-term hit as universities have favoured distance learning in many areas, but hotels have been eager to step in, with Scandic Hotels Group announcing that it was moving into the market as it sought to replace lost revenue from traditional hotel guests.

Senior living

Issues related to the pandemic cast senior living in a poor light after years of growth, but the faltering led to a spate of deals in the sector, as investors showed themselves eager to get into a growth market. Michael Hodges, managing director, Christie & Co’s healthcare consultancy business, told us -  assuming a normalised market before Coronavirus - “Elderly care and senior living has been a key area of focus for many investors over the last few years. A key reason for this is that the sector is need driven with the demographic trends showing a material increase in the elderly population over the next 20 to 30 years. Historically the sector has been seen as alternative, now it is becoming much more mainstream.”

Coliving

Coliving was seen as the future of urban living, a future now under question as the urban centres looked less attractive during the pandemic. However, the cities were expected to bounce back and, with coliving still a niche investment, demand was expected to meet supply.

Extended stay

Extended stay has been the winner of the pandemic, as breakeven at 20% made it more attractive to investors and developers and many more sites in the segment stay open than traditional hotels, in part because of their ability to accommodate social distancing.