Luxury Hotel-Branded Apartments Entice Buyers
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Luxury Hotel-Branded Apartments Entice Buyers

Overall hotel-branded residences more than doubled between 2010 and 2020.

By Ruth Bloomfield
Wed, Aug 11, 2021 2:51pmGrey Clock 4 min

Luxury residences attached to five-star hotels have long been a hit with apartment buyers who wanted a place to live with access to hotel services and amenities.

Now, developers are finding that they can sell units at above-market rates for a luxury hotel branded residence, even if there’s no accompanying hotel.

U.K. developer Finchatton transformed the former British headquarters of the U.S. Navy into the Four Seasons Hotels & Resorts’ first stand-alone private residences, featuring 37 homes with sales prices starting at 17.5 million pounds, approx. $33 million.

The project completed construction in London’s Mayfair neighbourhood in 2019. Despite an interruption in sales caused by the pandemic, “only a handful” of units remain unsold, said a spokeswoman for the selling agent Knight Frank.

Mandarin Oriental is poised to open its first stand-alone branded residences in New York City, Beverly Hills and Barcelona. The U.S. residential units are expected to hit the market in the fall, the company said.

In Utah, the St. Regis Deer Valley, which opened in 2009, has recently added private residences to the resort. Hilton Worldwide Holdings Inc. is working on a number of stand-alone branded residences under its Waldorf Astoria and Conrad brands and plans to announce at least one project within the year, a spokeswoman said.

Overall, the number of hotel-branded residences more than doubled between 2010 and 2020. The sector added 52,000 homes in 370 separate developments, according to real-estate firm Savills PLC.

Originally, these residences offered a convenient way for property developers to fund the building of high-end hotels, which can be costly and challenging to finance through conventional loans. Instead, proceeds from apartment sales help cover the hotel construction costs.

“If I put your brand on it, it will help me sell these residences faster and for a higher price,” said Tim Grisius, Marriott International Inc.’s global mergers and acquisition and real estate officer.

Marriott has built 17 stand-alone luxury residences worldwide, in places like Sunny Isles Beach in South Florida and Bodrum, Turkey, under its Ritz-Carlton brand. It has another 17 projects in the pipeline.

‘If I put your brand on it, it will help me sell these residences faster and for a higher price.’

— Tim Grisius, Marriott International

As these residences grew in popularity, real-estate firms found that the units attracted wealthy buyers even without the full slate of hotel amenities. That’s because buyers of private residences tend to have a strong loyalty to the luxury brand and believe that attention to detail will be high, said Rupert des Forges, head of prime central London developments at Knight Frank.

“They feel that the brand would not put its name to something if they could not provide the right level of service,” he said.

Branded residences usually offer much the same services as a luxury hotel but on a smaller scale, including spa facilities, a bar and restaurant, movie theatre, and private dining rooms. Hotel-trained staff run the property and concierge, promising the same level of service to owners as to hotel guests.

Apartment buyers are often willing to pay a premium for branded residences compared with other luxury buildings, though the level of that premium varies. In London, a city overflowing with prime apartment buildings, Mr. des Forges said the extra cost of buying the property, compared with an equally high-end new apartment, was marginal.

In the Alps, however, five-star brands are increasingly experimenting with residences in ski resorts. Jeremy Rollason, head of real-estate agent Savills’s ski department, said these residences far outdo the resorts’ existing apartment buildings. He estimates that buyers have to pay premiums of between 10% and 20% for these “ultraluxury” homes.

The Mandarin Oriental Residences, Barcelona, is part of the luxury brand’s first wave of stand-alone residences. PHOTO: COURTESY OF MANDARIN ORIENTAL RESIDENCES|, BARCELONA.

Hotel residences have existed at least since 1927, when New York City’s Sherry-Netherland opened. But it wasn’t until the 1990s that the sector really took off. By last year, branded residences were located in more than 60 countries, according to Knight Frank.

After tapping demand in traditional coastal and city locations, developers are now building these residences in upscale ski resorts in Europe and the U.S.

Hard Rock Café International Inc. opened its first European ski resort and residences in Davos, Switzerland, in 2017, while Ritz-Carlton plans to open in 2026 a resort plus residences in Zermatt, Switzerland.

While the pandemic has slowed most international travel, Marriott’s Mr. Grisius said that demand for residences had actually increased, possibly at the expense of traditional hotels.

“People are not travelling as much,” he said. “Our residences are fuller than they usually are.”

The library at 20 Grosvenor Square, Four Seasons’ stand-alone branded residences in London.
PHOTO: FINCHATTON 

Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: August 10, 2021



MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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Hotel experience at home in Castle Hill

A new development in the Hills District sets a new standard in buyer expectations

By KANEBRIDGE NEWS
Wed, May 22, 2024 3 min

Castle Hill is set to be home to a new hotel-like development, with the announcement that the 94-apartment Astrid site is just weeks away from completion.

While the penthouse apartments across the two buildings have already been snapped up, there are still one, two and three-bedroom residences on offer. The development comes with a gold star iCIRT rating, guaranteeing it has met quality construction standards. The iCIRT rating system has been developed by Equifax in partnership with government, industry and market and rates projects from one to five stars following a rigorous and independent review process.

Steve Harb from developer CBD Core, said it’s the best indicator would-be buyers could have that their investment is safe.

“The iCIRT rating gives people the assurance that we’re trustworthy and have integrity as a developer,” he says. “Our service is complete from start to finish, from developer to builder. 

“As a buyer, you have one point of contact, there’s no shifting responsibility or passing the buck so if anyone has an issue, it can be sorted out as soon as possible.”

He said Astrid has proved popular with locals interested in upgrading without leaving the convenience and amenity of the Hills District. Surrounded by some of the best restaurants, clubs and recreational facilities in the area, it is also just six minutes’ walk to the new Metro station and a seven-minute drive to Castle Towers Shopping Centre. Schools and tertiary education options are also within an easy drive. In addition to some of the best parks and reserves in Sydney, it’s an attractive option for families on the move.

Mr Harb said the concept for the development, as with all his projects, was to create a hotel-like environment.

“I only do boutique projects and when I say ‘boutique’, I mean hotels without the concierge,” he says. “The quality and integrity is built into it.”

The infinity edge pool is surrounded by leafy gardens in a resort-style environment.

Leisure facilities include rooftop gardens and entertaining spaces as well as a fully equipped gym on the ground floor overlooking an infinity edge pool surrounded by lush landscaped gardens. Mr Harb says beautiful landscaping is a signature of all his developments.

“I have lived in the Hills District for more than 15 years and the reason I live here is because I love the leafy environment, the greenery,” he says. “I always like to emphasise that in my developments with strong landscaping.”

WORK FROM HOME HUB

Recognising the ongoing desire to adopt a hybrid working model, Astrid provides a dedicated on-site working environment suitable for exclusive use by residents needing focused work time, as well as those seeking professional meeting rooms to receive clients, with wifi enabled work desks, as well as more casual seating. 

Mr Harb said the pandemic taught him that, while working from home was convenient, having breakout spaces within a wider residential development was highly attractive.

“You’re not stuck looking at the same four walls,” he says. “The shared work space at Astrid has comfortable lounges, chairs, coffee tables and more than a dozen cubicles,” he says. “It’s more like going into a meeting room in a hotel.”

The apartments are characterised by light-filled interiors.

IN RESIDENCE

The apartments are light-filled living spaces with seamless access to balconies, through to integrated joinery secreting storage. Finishes have been chosen to last, from the Michael Angelo Quartz benchtop and Char Oak Polytec Ravine joinery in the kitchen to the stone splashback and custom-made joinery in the bathroom.

Access throughout the buildings is via a swipe card, providing a secure environment. 

For more information, see Astrid Castle Hill.

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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