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