LATEST research shows that London is still a magnet for overseas visitors. More than 11 million tourists and businesss travellers visit the capital each year.

In the first eight months of 2005, occupancy rates for hotels in the capital were an encouraging 79 per cent while revenue from available hotel rooms rose 2.8 per cent.

City workers with a bonus to spend might consider the latest project from the company behind the UK's hotel buy-to-let scheme.

This week GuestInvest invited investors to buy a stake in a 170-room hotel currently being built in Paddington that is due to open early next year.

Chief executive Johnny Sandelson says rooms at Nest are on sale off plan priced from £175,000 for a 999 year lease.

He explained: "Investors buy their own full maintained room at Nest, stay there for up to 52 nights a year for free and receive 50 per cent of the room's income which is let out by the hotel on their behalf throughout the year."

A similar scheme at GuestInvest's debut hotel in Notting Hill launched in April 2004 sold out within weeks. Investors who bought into that have seen returns in excess of 6.5 per cent in the first 18 months. Those who have since sold their investment have netted a capital growth of ten per cent.

The latest hotel has been designed by a new company of architects Cowie Dalgleish Montgomery in collaboration with British super yacht builder Pendennis. A prototype of the room is catching the eye of commuters at Paddington Station. It will be on display until February 12.

Sandelson hopes the venture will appeal to people looking to add to the pension portfolio. It is classed as commerical property and recommended by advisers Jardine Lloyd Thompson and Openwork (Zurich). However, under tax rules, investors who buy a room as part of a SIPP won't be able to stay there for free though they will receive an increased return on their holding because the management will be able to let it more often.

Sandelson sums up: "Through GuestInvest we are effectively creating a brand new asset class which is now a recommended SIPPs investment with very attractive tax advantages. Nest offers a fantastic opportunity to invest in a secure strong-performing hassle and maintenance-free asset."