Hold ’em or fold ’em

One of the interesting contrasts between the serviced apartment and hotel sectors is how many of the big serviced apartment players are keen to own the bricks and mortar they operate, as opposed to the asset-light strategy adopted by the majority of the big hotel groups.

To cite a couple of recent examples, Ascott’s serviced residence fund, in conjunction with partner Qatar Investment Authority, has announced the purchase of significant assets in Paris and Tokyo, to be operated by its Citadines and Somerset brands respectively.

And in our latest feature interview, Reiner Nittka of German developer and investor GBI AG, outlines how his company builds assets fro players such as Ascott, Frasers and Adina/Toga, which his clients go on to own and operate.

Clearly there are plenty of management contracts, leases, franchises and various combinations of all three, in the industry – with the ‘manchise’ seemingly becoming a popular option for new owners to the space.

With many of the major operators owned by funds rather than being listed companies, the outlook tends to be of a more long-term nature, with the reassurance of owning real estate seen as a benefit rather than viewing it as a weight on the balance sheet which the major hotel players do.