Mixed de­vel­op­ments in GCC

Ser­viced ho­tel apart­ments have now popped up in al­most all ma­jor cities across the world. Saad Audeh, Found­ing Mem­ber & MD, Audeh Group and Chair­man, Camp­bell Gray Ho­tels, shares in­sights...

TravTalk - Middle East - - GUESTCOLUMN -

The lux­ury end of the mar­ket in par­tic­u­lar, has in­di­cated an in­crease in de­mand for ser­viced apart­ments. Th­ese apart­ments, usu­ally lo­cated in the same build­ing or be­side the ho­tel prop­erty, are ser­viced by the ho­tel with all ameni­ties, lux­u­ries and ser­vices avail­able to a ho­tel guest. In the case of mixed-use prop­er­ties, res­i­dents can also take ad­van­tage of the re­tail spa­ces, and some­times even of­fice space within the de­vel­op­ment. This is the rea­son why most in­vestors and buy­ers are now seek­ing ho­tel res­i­dences for in­vest­ment to meet the in­creas­ing de­mand in the GCC. This is par­tic­u­larly the case when look­ing at branded res­i­dences that are as­so­ci­ated with a renowned ho­tel group, as it of­fers a level of as­sur­ance when it comes to qual­ity and re­sale value. It can also of­fer in­no­va­tive ar­chi­tec­ture, de­signer in­te­ri­ors and out­stand­ing qual­ity as a bonus for buy­ers and in­vestors. Those look­ing into branded res­i­dences gen­er­ally iden­tify with a cer­tain life­style and taste closely as­so­ci­ated with that brand to then repli­cate the ethos within their own liv­ing space. There is also the ad­di­tional ben­e­fit of a higher re­turn on in­vest­ment when com­pared to reg­u­lar res­i­dences while look­ing at rent­ing out or re­sal­ing the apart­ments. Re­cent stud­ies con­ducted by Col­liers In­ter­na­tional show that lux­ury ho­tel chains are now ex­pand­ing their port­fo­lios and di­ver­si­fy­ing into bou­tique ho­tels, lux­ury re­sorts and de­signer branded res­i­dences to meet the changes in at­ti­tude within the mar­ket. Ho­tel res­i­dences have seen stronger re­silience through tough times when com­pared to ho­tels. This busi­ness and in­vest­ment model con­tin­ues to evolve to pro­vide in­vestors with an in­creas­ingly es­tab­lished as­set class in the re­gion. Re­tail space, in ad­di­tion to the apart­ments, pro­vides an­other at­trac­tive in­vest­ment within each de­vel­op­ment. Trends show that a con­struc­tion boom is shap­ing up for the Mid­dle East and North Africa (MENA) re­gion in 2018. As one of the fastest grow­ing re­gions glob­ally for the con­struc­tion sec­tor, the GCC is set to out­pace the global growth, ex­pand­ing by 5.8 per cent to hit $225bn, ac­cord­ing to BMI Re­search, a Fitch Group com­pany. The GCC will be, both in the short and longterm, ex­pand­ing by an an­nual av­er­age of 6.5 per cent over the next five years to hit $330bn. Pos­i­tive de­mo­graph­ics, grad­ual rise in oil prices and am­bi­tious eco­nomic di­ver­si­fi­ca­tion agen­das through­out the re­gion con­trib­ute to this growth. This will have a pos­i­tive im­pact on the prop­erty mar­ket in mak­ing GCC at­trac­tive for in­vestors. Mar­kets in the GCC are pro­gres­sively grow­ing due to in­creased tourism ini­tia­tives by gov­ern­ments; so de­mand for room nights will in­crease. Mar­kets like UAE and Saudi Ara­bia have been grow­ing rapidly over the years. Saudi Ara­bia is ex­pected to be a hotspot in the re­gion with many new op­por­tu­ni­ties open­ing in the tourism sec­tor. The King­dom’s di­ver­si­fi­ca­tion plans, new visa pro­grammes and large-scale projects are ex­pected to con­trib­ute to the growth in tourism for both busi­ness and leisure tourism. .

There is also the ad­di­tional ben­e­fit of a higher re­turn on in­vest­ment while look­ing at rent­ing out or re­selling the apart­ments when com­pared to reg­u­lar res­i­dences

Saad Audeh Found­ing Mem­ber & Manag­ing Di­rec­tor Audeh Group and Chair­man Camp­bell Gray Ho­tels

(The views ex­pressed are solely of the au­thor. The pub­li­ca­tion may or may not sub­scribe to the same.)

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