Across the world the ultra-prime property sector is booming. In newer markets, such as Sydney, Berlin and Cape Town, they consistently outperform the wider market and, even in locations like London where the market is affected by fears over Brexit, super high-end properties are proving as desirable as ever.
But when every luxury development occupies a prime position in a great city and comes complete with a swimming pool, gym and spa, how do you convince high-net worth investors that your property is the right one for them? The answer for many developers has been to offer the kind of service levels previously only seen in the world’s finest hotels.
“There has been a dramatic technology-enabled improvement in the quality, access and affordability of services on offer in everyday life over the past decade and this has served to increase customers’ expectations of the services that should be available to them at home,” says Gabriel York, co-CEO of Lodha UK, whose London developments offer residents everything from on-site nurseries to captains to move their yacht from one port to another.
“Arguably it was the yacht designers and owners who invested a lot of money in creating their perfect floating home that have translated this approach into residential,” adds Charles Penny, a global wealth ambassador for Knight Frank. He explains that in investment terms serviced apartments not only sell at around 20% above the rest of the market but are also more robust in a downturn, making them particularly attractive following uncertain financial times.
So who is buying these properties and what exactly are they getting for their money? While it seems buyers are looking for a mixture of primary residences and second or third homes, it is clear that across the board investors are from a time-poor, frequent flying international set interested in buying a lifestyle rather than just a home. “People are willing to spend a premium on these buildings and there are higher maintenance costs associated with them – the only reason you would do that is for the service you’re getting,” says Penny. “You can’t really put a value on convenience and being able to completely make your life efficient.”
The Stratford, a new development in London’s Olympic Park that is largely available only to renters, basic services include 24-hour room service, housekeeping and grocery stocking but many residences are going far beyond this. The offering at One Barangaroo, Crown Resorts’ first foray into residences which occupies an unrivalled spot overlooking Sydney Harbour and where prices are rumoured to reach the $100 million mark, for example, is a unique proposition for the Australian property market.
One of a number of increasingly popular branded residences, where homes are owned privately but serviced by an established hotel group such as the Four Seasons or Mandarin Oriental, the 82 properties at One Barangaroo sit atop Crown Resorts’ six-star hotel affording owners access to all the services available to regular hotel guests plus a whole host more. “You can call ahead and say, ‘I’m coming home can you put the heating on, can you put some fresh flowers out and I want some milk in the fridge,’ and it’s all sorted for you,” says director of sales and marketing Erin van Tuil. “One Barangaroo is very much viewed as a bit of a once in the lifetime. There’s nowhere else on the harbour where we’d be able to do it.”
And, while van Tuil does warn that elements such as location, architecture and interior design have to be correct regardless of the hotel group attached to a building, there are some big benefits to investing in a branded residence. “In a non-branded building you may find the residents want to cut back on service charges so they get rid of certain elements and standards aren’t maintained. You don’t have that with a branded residence. The pool has to be a six-star quality pool regardless. You may also find you’re paying more for services to come in to a separate building whereas in a branded residence they already exist, the residences are simply like extra hotel rooms.”
York, whose Lodha properties offer service through a dedicated arm of the business known as St Amand, counters this by saying, “We are uniquely placed to deliver residential hospitality services to our customers because of the journey we go on from the point of purchase, through construction to handover. This journey may last more than two years and we form a very close relationship over this time. The transition to our own hospitality team means that the history of that relationship is transferred and allows us to tailor our services to the evolving needs of residents.”
Accordingly St Amand’s team, recruited from high-end hotels such as the Savoy, are able to add and remove services to suit the residents of a particular building. So, while one Lodha property may offer a chauffeur service and on-call security, another may provide babysitting and education consultants.
Fred Scarlett, sales and marketing director of Clivedale London, which is currently working on both the branded Residences at the Mandarin Oriental Mayfair and non-branded Mansion in Marylebone, believes that regardless of format service will remain at the forefront of the ultra-prime market. “This demand for intelligent, time-saving services shows no sign of diminishing and, as we look to the future, I would expect developers to curate an even more intuitive and tailored selection in new build properties." Clivedale itself is looking to do this by partnering with famous brands - a Bentley chauffeur service, Fortnum & Mason grocery deliveries and Bamford spa treatments will all be available at The Mansion.
The range of service formats and the number of new developments offering them means competition in this sector is only going to increase over the coming years, with the offerings becoming increasingly all-encompassing. However, as Scarlett neatly surmises, the central premise for each is the same, “for many of our wealthy and time poor clients it’s all about lifestyle. Our job is to serve their needs while they are at home and make sure that their property is looked after when they are not.”