The number of hotel-branded apartments globally has more than doubled between 2010 and 2020.
Branded apartments are priced higher than ordinary houses in the same segment
Luxury residences attached to five-star hotels have long been a highlight for apartment buyers who desire a place to stay with hotel services and amenities.
Developers are now finding that they can sell apartments at above-market prices for a hotel-branded unit (aka luxury condo) in the luxury segment, even when those apartments are not part of a project that includes a hotel.
UK developer Finchatton has turned the former headquarters of the British Navy into Four Seasons Hotels & Resorts’ first independent branded residences, featuring 37 homes with prices from £17.5m, equivalent to 24.3 million USD.
A spokesman for estate agent Knight Frank said the project, located in London’s Mayfair neighborhood, completed construction in 2019. Despite limited sales due to the pandemic, “only There are still a few” apartments that have not been sold.
Branded apartments The St. Regis Residences, Boston will open in 2022
Meanwhile, hotel operator Mandarin Oriental is getting ready to open its first independent branded apartments in New York City, Beverly Hills and Barcelona. The group said apartments in the United States are expected to go on sale in the fall of this year.
In the state of Utah, USA, the resort of St. Regis Deer Valey opened in 2009, but recently added new branded apartments located adjacent.
And Hilton Worldwide Holdings Inc. is developing several independent apartment projects under the Waldorf Astoria and Conrad brands, and could announce at least one this year.
Overall, the number of hotel-branded apartments more than doubled between 2010 and 2020. The sector added 52,000 homes in 370 standalone projects that don’t include hotels, according to the company. real estate company Savills PLC.
Initially, these apartments were a way for real estate developers to raise capital to build high-end hotels, which are often very expensive and lack financial resources if only taken from conventional loans. Proceeds from the sale of the apartment help cover the cost of building the hotel.
Tim Grisius, global mergers and real estate officer at Marriott International Inc. “If I put the hotel brand on the apartments, they will sell faster and at a higher price,” said.
Marriott has built 17 independent luxury residences worldwide, in tourist destinations such as Sunny Isles Beach in South Florida and the coastal city of Bodrum in Turkey under the Ritz-Carlton brand. . The world’s largest hotel operator has 17 other projects underway, of which two have been announced in Vietnam in cooperation with Masterise Group, Grand Marina Saigon and Rizt Carlton Residences Hanoi.
As luxury apartments became popular, real estate companies found that they attracted affluent buyers even without the full range of hotel amenities. That’s because this individual customer is often very loyal to a high-end brand and believes the attention to detail in these apartments will be very high, said Rupert des Forges, head of the development department. project in the central London area of Knight Frank said.
“They feel that the brand cannot be associated with a project if the project cannot provide the right quality of service,” he said.
Branded apartments often offer many of the same services as a luxury hotel but on a smaller scale, including spa facilities, bars and restaurants, cinemas and private restaurants. The staff here are trained and guided by the hotel operators, promising to bring the service quality worthy of a 5-star hotel to the apartment owners.
Apartment buyers are often willing to pay a higher price for branded apartments compared to other common apartments even though they are in the luxury segment. The price difference varies by brand, project, investor and market. Mr. des Forges said that in London, a city overflowing with high-end apartment buildings, the cost to buy this property compared to a comparable luxury new apartment is very low.
In the Alps, however, five-star brands are increasingly developing luxury apartments inside ski resorts. Jeremy Rollason, property manager at Savills ski resorts, said the apartments offer quality, service and amenities that go beyond the resort’s existing apartment buildings. He estimates that buyers have to pay a 10% to 20% difference in fees compared to conventional apartments in the same segment for these “super-luxury” homes.
Mandarin Oriental Residences, Barcelona’s branded apartments are developed independently, without a hotel
Hotel-branded apartments have existed since at least 1927, when the Sherry-Netherland project in New York opened. But it was not until the 1990s that the field really developed. According to Knight Frank, by last year, luxury apartments had developed in more than 60 countries.
After tapping into demand in traditional locations such as coastal areas and cities, developers are now building these branded apartments in high-end ski resorts in Europe and the United States. Ky.
Specifically, Hard Rock Café International Inc. opened its first luxury apartment ski resort in Europe in Davos, Switzerland in 2017. Meanwhile, the Ritz-Carlton plans to open a luxury apartment resort. in Zermatt, Switzerland in 2026.
Twenty Grosvenor Square Mayfair Four Seasons Residences in London
While the pandemic has slowed most international travel, Mr Grisius from Marriott says demand for housing has indeed increased, which could bode well for traditional hotels. .
“People don’t travel much anymore, so luxury apartments receive more guests than usual,” he said.