Sleep 2014, the hotel design event, took place this week at the Business Design Centre, London. We were there to pick up on all the latest views and feedback from the panel session based around the serviced apartment and aparthotel concept entitled:
Long-stay lodging may be the next revolution in hospitality but so far it is not revolutionary in design. Can an apartment be as “cool” as a hotel room? Here we explore how design can help differentiate in an area where there is little opportunity for service to deliver customer satisfaction.
The panel comprised Asli Kutlucan, partner, Cycas Hospitality; Edward Price, director, Forme UK; Gordon Ferrier, director and head of hotel sector, 3DReid; and Paul White, director, Buckley Gray Yeoman and was moderated by the eloquent David Curtis-Brignell.
David started the session summarising the growth the serviced apartment and extended stay sector was experiencing highlighting the growth of equity funds investing in the sector and a pipeline of approximately 1,700 units in London and future developments due to launch in the years ahead. Some of these included office conversions, which are highlighted as becoming increasingly popular within the capital based on a higher yield investor expectation. With high land values in London, this has seen more serviced apartment developments spring up in areas surrounding the capital and other UK cities to meet growing demand in the regions.
Corporate housing v Extended stay definition
Asli explained the “main differences are based on design and specification in that there’s more space and living area in corporate housing. Whereas extended stay is all about differences in design – smaller rooms, there’s usually a small food and beverage offering coupled with public areas.” A clear, concise definition document endorsed by the major brands within the sector can be viewed here
Cheval Residences and Three Quays project
The conversation moved on to discussing examples of recent developments Edward, Gordon and Paul had worked on with Cheval Residences the focus. Edward outlined that every property within the portfolio “has its unique style and differences in interior design – following our work and refurbishment of Calico House, we saw a twenty five percent increase in revenues.”
The company’s most recent project, Three Quays, launched earlier this year is a new iconic building north of the river Thames directly adjacent to the Tower of London. “It comprises 159 suites and a stunning 350 sq meter penthouse which can be a four bed or split into 2 x two beds. Refurbishments average 10-12 years so we look at longevity in materials and style from the offset” Edward enlarged on the construction process saying it was very similar to a hotel with the exception that there is “less communal food and beverage required, a mechanical and electrical services plant on the roof, water use regulations to consider and increased electrical work due to kitchens in every apartment.” Gordon’s company, 3D Reid also worked on the project, and highlighted the Three Quays building has both C1 and C3 flexible planning use with 90 and 50 units allocated respectively.
Serviced Apartment and Aparthotel Investment
Gordon felt there are substantial opportunities for the European aparthotel sector to grow in the coming years and the offering “is a better bet for investors” in the future, outlining the general trend of reducing the size of standard new build hotel bedrooms and conversions, there is more of a demand towards the sector.
Asli said Cycas Hospitality’s extended stay lease model ensures investor risks are lower than a comparable hotel offering – “there’s less staff to pay and manage, and lower food and beverage costs for instance.” Asli shared the Gross Operating profit of well managed extended stay products averages between 50 and 60%, against a comparable 4 star hotel offering which has figures almost half at 30-32%, “meaning net income is almost double.”
To close the session David asked all panellists “if you’re using your own money to invest in hospitality today, where would you put it?” – you don’t need to guess what they were all agreed on.
A more detailed summary of the serviced apartment investment landscape for Europe and overseas can be viewed here.
Extended stay – the hospitality investment of the future?
Sleep 2014, the hotel design event, took place this week at the Business Design Centre, London. We were there to pick up on all the latest views and feedback from the panel session based around the serviced apartment and aparthotel concept entitled:
Long-stay lodging may be the next revolution in hospitality but so far it is not revolutionary in design. Can an apartment be as “cool” as a hotel room? Here we explore how design can help differentiate in an area where there is little opportunity for service to deliver customer satisfaction.
The panel comprised Asli Kutlucan, partner, Cycas Hospitality; Edward Price, director, Forme UK; Gordon Ferrier, director and head of hotel sector, 3DReid; and Paul White, director, Buckley Gray Yeoman and was moderated by the eloquent David Curtis-Brignell.
David started the session summarising the growth the serviced apartment and extended stay sector was experiencing highlighting the growth of equity funds investing in the sector and a pipeline of approximately 1,700 units in London and future developments due to launch in the years ahead. Some of these included office conversions, which are highlighted as becoming increasingly popular within the capital based on a higher yield investor expectation. With high land values in London, this has seen more serviced apartment developments spring up in areas surrounding the capital and other UK cities to meet growing demand in the regions.
Corporate housing v Extended stay definition
Asli explained the “main differences are based on design and specification in that there’s more space and living area in corporate housing. Whereas extended stay is all about differences in design – smaller rooms, there’s usually a small food and beverage offering coupled with public areas.” A clear, concise definition document endorsed by the major brands within the sector can be viewed here
Cheval Residences and Three Quays project
The conversation moved on to discussing examples of recent developments Edward, Gordon and Paul had worked on with Cheval Residences the focus. Edward outlined that every property within the portfolio “has its unique style and differences in interior design – following our work and refurbishment of Calico House, we saw a twenty five percent increase in revenues.”
The company’s most recent project, Three Quays, launched earlier this year is a new iconic building north of the river Thames directly adjacent to the Tower of London. “It comprises 159 suites and a stunning 350 sq meter penthouse which can be a four bed or split into 2 x two beds. Refurbishments average 10-12 years so we look at longevity in materials and style from the offset” Edward enlarged on the construction process saying it was very similar to a hotel with the exception that there is “less communal food and beverage required, a mechanical and electrical services plant on the roof, water use regulations to consider and increased electrical work due to kitchens in every apartment.” Gordon’s company, 3D Reid also worked on the project, and highlighted the Three Quays building has both C1 and C3 flexible planning use with 90 and 50 units allocated respectively.
Serviced Apartment and Aparthotel Investment
Gordon felt there are substantial opportunities for the European aparthotel sector to grow in the coming years and the offering “is a better bet for investors” in the future, outlining the general trend of reducing the size of standard new build hotel bedrooms and conversions, there is more of a demand towards the sector.
Asli said Cycas Hospitality’s extended stay lease model ensures investor risks are lower than a comparable hotel offering – “there’s less staff to pay and manage, and lower food and beverage costs for instance.” Asli shared the Gross Operating profit of well managed extended stay products averages between 50 and 60%, against a comparable 4 star hotel offering which has figures almost half at 30-32%, “meaning net income is almost double.”
To close the session David asked all panellists “if you’re using your own money to invest in hospitality today, where would you put it?” – you don’t need to guess what they were all agreed on.
A more detailed summary of the serviced apartment investment landscape for Europe and overseas can be viewed here.
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